The ACCC has granted interim authorisation to allow the Australian Banking Association (ABA) and banks to continue to work together on a variety of existing COVID-19 related relief packages, so they can respond to any further outbreaks as required.
The COVID-19 related relief packages allow for temporary and limited coordination between the ABA and participating banks to defer loan repayments and waive certain banking fees for small businesses impacted by the pandemic. The coordination also allows banks to facilitate second phase financial recovery and maintain access to banking services for small businesses.
According to the Australian Banking Association, support for customers in need across Australia continues to be available.
On application, the support includes
Business banking repayment deferrals:
- Up to 3 month repayment deferrals, with loan terms extended accordingly
- Offered to all small business customers (business lending less than $3m and a turnover of less than $5m), which includes up to 98% of small businesses
- Only for loans in good standing (i.e. repayments up to date or engaged in a payment program with their bank)
Everyday banking support
- Refunds of merchant terminal fees for up to 3 months
- Waiving of fees and notice periods on Cash Deposit and Farm Management Deposit accounts for up to 3 months
Home loan support
- Range of support measures, including deferrals on a month by month basis
- Available to both individual and business customers
“In the context of COVID-19 related lockdowns and restrictions, the ACCC recognises that large numbers of businesses and individuals are continuing to experience significant financial hardship,” ACCC Chair Rod Sims said.
The ABA says that “The number of customers accessing hardship grew by 73% this week, compared with a growth of 153% the week before. Growth in housing loan deferrals similarly slowed from 344% to 79%, while growth in business loan deferrals grew from 93% to 108%.
Banks have dedicated hardship teams who stand ready to listen and consider a range of options that suit customers’ circumstances. Almost 24,000 people since early July have accessed a range of support measures offered by their bank and 64% of these have opted to defer their loan repayments for up to 3 months.”
Sims says “We consider that the ABA’s coordinated packages are likely to assist banks with providing relief to businesses and other customers impacted by COVID-19 restrictions, maintain access to banking services and support financial recovery.”
“Importantly, as well as offering customers the packages covered by the interim authorisation, banks can also individually offer more favourable and tailored solutions to their customers experiencing financial hardship during these times,” says Sims.
“Without this authorisation, banks would be forced to offer separate financial relief packages without standardisation or consistency.”
Having granted interim authorisation for the package, the ACCC is seeking feedback on its draft determination proposing to grant substantive authorisation to the ABA on the same terms until 30 June 2022.
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