AUSTRALIAN BANKERS’ ASSOCIATION ENCOURAGES CUSTOMERS TO CONTACT THEIR BANK IF ADVERSELY AFFECTED BY DROUGHT Sydney, 3 October, 2002: The Australian Bankers’ Association urges any bank customers who may be adversely affected by the drought in Victoria to contact their bank. Ian Gilbert, Acting Chief Executive of the Australian Bankers’ Association (ABA), welcomed the Victorian Government’s drought relief package and said the ABA will continue to work closely with the Victorian Government on its Dry Seasonal Conditions Taskforce. “Australian banks have a long history of working with farmers through seasonal cycles, by putting in place arrangements for special financial needs in times of drought,” he said. “While banks, farmers and rural communities would prefer that drought did not happen, the reality is that managing the financial impact of drought is a normal part of the business of farming in Australia.” “Banks manage the impact of drought on customers on a case-by-case basis reflecting varying impacts and options available to individual customers.  The financial position of individual customers varies and this determines the options that are available.” Mr Gilbert said farmers and other rural businesses experiencing difficulties because of the drought need to understand their financial position so that they can work together with the bank to identify the options that best suit their businesses. During drought: farmers and rural businesses will want to identify and manage all costs that can be deferred in the short-term; in some cases, individual banks may, as a short-term measure, typically lend farmers carry-on finance to enable shortfalls in cash flow to be met; farmers that already have significant debt need to be prepared to draw on financial reserves such as Farm Management Deposits, investments in managed funds and other forms of off-farm investments; in some cases to help reduce cash out-goings, individual banks may put in place the short-term measure of restructuring existing loans so as to reduce annual debt repayments - this  may involve extending the term of a loan or allowing interest-only payments for a period of time. For further information contact: Heather Wellard ABA PR Phone: 02 8298 0411 Mobile: 0409 830 439 ENDS