The Australian Banking Association has announced up to 3 month repayment deferrals for all small business customers and extra support for mortgage owners affected by current or recent lockdowns in a move welcomed by the Morrison government.
ABA chief executive Anna Bligh said it was clear the recovery from recent lockdowns in some states like Victoria was slower than in previous cases and that customers could “rest assured that if they need help, they will get it.”
“Your bank will help you find a way through. Don’t tough it out on your own,” Ms Bligh said. “Banks also stand ready to support larger businesses and they will be assessed on a case-by-case basis.”
The Australian understands the proposal was discussed by Josh Frydenberg and chief executive of the Commonwealth Bank Matt Comyn on Wednesday afternoon before being formally announced on Thursday evening. The arrangements are also subject to authorisation by the competition watchdog.
Under the new arrangements, small businesses with lending of less than $3 million and a turnover of less than $5 million will be granted access to the 3 month deferral. This captures up to 98 per cent of small businesses.
The home loan support will include deferrals on a month by month basis and will be extended to both individual and business customers.
Other changes to everyday banking rules will also apply including refunds on merchant terminal fees for up to 3 months as well as the waiving of fees and notice periods on cash deposit and farm management deposit accounts for up to 3 months.
The Treasurer welcomed the announcement, saying it was “good to see the banks supporting small businesses affected by the most recent Sydney lockdown with up to 3 month loan repayment deferrals.”
“These are difficult days but with the combined support of government, industry and the broader public we will get through this together.”