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Major bank launches drought relief package

Major bank launches drought relief package

A big four bank has announced a range of initiatives to support customers affected by drought in NSW and Queensland which include the suspension of loan repayments and the waiving of fees.

According to reports, almost all of New South Wales is either in drought, on drought watch or experiencing the onset of drought, while more than half of Queensland is classified as in drought.

According to the latest drought update issued by the Bureau of Meteorology, “drier than average” conditions were reported in June, across large parts of South Australia, NSW and Queensland. The bureau noted that rainfall for the month was in the lowest 10 per cent of historical observations for some parts of the eastern mainland.

On Monday (9 July), ​Minis​ter for Agricult​​ure David Littleproud hosted a roundtable with farm groups and banks around drought policy.

Topics discussed included drought preparedness and resilience and how to best help farmers to ride out the cyclical nature of the farming business.

NAB has now announced a drought assistance package to provide relief for regional customers affected by prolonged drought conditions across NSW and Queensland.  

The bank noted that measures that may be available to eligible customers include:

  • extension of loan terms, consideration of restructure of loan repayments to interest-only and waiver of all associated extension/restructure fees
  • suspension of home and personal loan repayments
  • waiving of home loan and personal loan application fees
  • credit card and personal loan relief where appropriate
  • waiving of costs and charges for early withdrawal of term deposits (including Farm Management Deposits)
  • provision of support and counselling through NAB’s Employee Assistance Program

“[We] are acutely aware of the challenges and unpredictability of life on the land and the impact of drought on NAB customers, employees and the wider community,” NAB’s customer executive, regional and agriculture, Julie Rynski, said.

“Anyone who needs assistance or advice should contact their local banker so we can discuss their circumstances and determine the best way to help,” Ms Rynski added.

NAB’s announcement of its relief package follows on from censure regarding some of its conduct during another natural disaster.

During the fourth round of hearings of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, which focused on farming finance, natural disaster insurance and Aboriginal and Torres Strait Islander Australians’ interactions with financial services entities, a case study was brought to light regarding Queensland cattle-farming family and NAB customers, the Smiths, who were charged default interest for more than five years on one loan facility (and in excess of six years on another) when their business was affected by more than one natural disaster.

In her closing statement to the commission on Friday (6 June), counsel assisting Rowena Orr QC alleged that NAB engaged in conduct that fell below community standards and expectations by charging default interest over a prolonged period to the Smiths.

Ms Orr also claimed that the major bank engaged in conduct that fell below community standards and expectations by failing to adequately inform the Smiths of the bank’s hardship policy.

Ms Orr alleged: “It is open to the commissioner to conclude that NAB’s conduct in charging default interest to the Smiths over such a long period was the product of a culture by which default interest was used as a strategic tool to place pressure on borrowers in default.”

[Related: Further allegations of alleged misconduct revealed]

Major bank launches drought relief package
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