Banks adopting more prudent lending practices
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Banks will be engaging in more prudent business lending practices in the current economic climate, according to Australian Bankers’ Association chief executive David Bell.
Speaking at an ABA and member banks business roundtable in Cairns yesterday, Bell said the current economic conditions will mean that banks will be tightening up on their requirements — in that they may require more information, covenants or new conditions of businesses seeking to refinance or apply for a loan.
“It is important that banks continue to make prudent decisions on lending,” he said. “Obviously it does not make business sense to lend to a customer who cannot repay the loan. We need to remember the vital role played by sound lending in restoring economic growth, and we must work together to get through these difficult times.”
Bell said businesses that are doing it tough should contact their bank to work out a strategy for keeping on top of their loan. He added that many banks have specialist staff that assist customers who experience hardship.
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