Sydney, 23 April, 2007: The Australian Bankers’ Association (ABA) said the banking industry recognises the seriousness of the drought affecting the country, including the Murray Darling Basin (MDB), and member banks will continue in their resolve to support viable customers during these difficult times.

Banks have been providing our rural communities with special consideration and understanding during the drought by examining a customer’s circumstances on a case-by-case basis.

David Bell, Chief Executive of the ABA, is encouraging any bank customer who is worrying about the impact of the drought on their financial position to contact their bank, if they have not already done so.

“Banks manage the impact of drought on customers such as farmers, small businesses and individuals, 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 Bell said.

During drought:

• 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 outgoings, 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.

The ABA recognises the significant support given by the Government to date, including Exceptional Circumstances payments and welcomes any examination of additional measures to assist irrigators.

In addition, the banking sector will continue to consult with the Federal and State Governments regarding the impact of the drought and assistance measures.

For further information:

Heather Wellard
Director, Public Relations
Phone: 02 8298 0411
Mobile: 0409 830 439

ENDS