The Banking Code is a voluntary agreement
Banks must do more to help customers in financial difficulties, under the new Banking Code which has come into force.
The new voluntary code states that banks must contact customers they think may be heading toward debt problems.
The onus had been on people to contact their bank. The code, which applies to building societies too, also contains a pledge to responsible lending.
Consumer group Which? said the new code should have gone further, such as raising minimum credit card repayments.
Banks must now assess whether people will be able to repay their debt, before they are given new loans or have their credit limits increased.
To do this they must look at customers' credit ratings, and take into account their income and other financial commitments.
"This new Banking Code gives strong commitments that banks will lend responsibly and will help customers who may be heading towards financial difficulties," said Angela Knight, chief executive of the British Bankers' Association.
"People do panic when their money starts to go wrong; if they leave it alone it just gets worse.
"The long consultation process, now complete, has shown clearly what customers want and expect from their banks.
"That has been the driver for these changes."
The new code also calls on banks to:
- Provide customers with important information about unsecured loans and savings accounts in a standard summary box before they purchase a product
- Give help to consumers switching their current account to another bank
- Give customers greater clarity on the time it takes for cheques to clear
- Offer customers the most up-to-date information on how to protect their accounts from fraud
- Inform customers about the alternatives to chip-and-pin cards for people who are unable to use these because of a disability or medical condition
Banks are also prevented from switching a customer from a free account to a fee-paying one without their permission.
The new code follows an independent review, which included consultation with the Treasury, Financial Services Authority, and Office of Fair Trading.
"A lot more could have been done to really benefit consumers," said Vera Cottrel, principal policy adviser at Which?
And Peter McNamara, former head of personal banking at Lloyds TSB, warned that there was still a responsibility on banks' customers.
"People have to look at their own affairs. It is wrong to imagine that the banks are always going to be able to protect you when you are going to run into difficulties," he said.
Help the Aged took the opportunity to criticise the banking authorities, claiming they continued to rule out some credit applications because applicants were too old.
"It is both unacceptable and indefensible for commercial organisations to discriminate solely and blatantly on the grounds of age in the 21st century. It is archaic, misguided and wrong," said Kate Jopling, head of public affairs at the charity.