Changes to bankers’ codes of practice were watered down in the face of bank objections, the banking royal commission has heard.

Philip Khoury, a consultant and former officer with corporate watchdog ASIC, was appointed by the Australian Banking Association in 2016 to review the code of practice for small business lending in a process that went through to April this year when a final draft was released.

The code would be enforced by ASIC once it is created. But to date it has not been implemented.

The draft deals with how small business is to be treated by banks as a result of their not being covered by consumer protection laws demanding responsible lending that apply to personal loans and mortgages.