BANKS URGE CUSTOMERS TO MAKE CONTACT IF ADVERSELY AFFECTED BY DROUGHT Sydney, 22 July, 2002: The Australian Bankers’ Association urges any bank customers who may be adversely affected by the drought to contact their bank. David Bell, Chief Executive of the Australian Bankers’ Association (ABA), said the ABA has today informed the major political parties in New South Wales how 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. Mr Bell said banks have and will continue to work with Governments that provide assistance to farmers and rural communities in times of drought in the form of interest rate subsidies, fodder subsidies, fodder transport subsidies, livestock transport subsides, crop planting grants, general grants, unemployment benefits and Austudy assistance. “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 Bell said farmers and other rural businesses experiencing difficulties because of drought need to understand their financial position so that they can work together with the bank to identify the options that best suit their business. 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 cashflow 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