fbpx
Skip to main content
New Financial Assistance Hub

ABA responds to Carnell inquiry recommendations

28 April 2017

Sydney, 28 April 2017: The Australian Bankers’ Association has today released its response to the Australian Small Business and Family Enterprise Ombudsman’s report into small business lending.

ABA Chief Executive Anna Bligh said banks supported the recommendations to make banking better for small businesses.

“Small businesses play a pivotal role in our national economy and in local communities. It’s important they can readily access affordable finance to invest and grow.

“Banks recognise they need to improve lending practices so small business customers have more certainty and can better understand loan terms and conditions,” she said.

“There will be a reduction in the number of specific events that could result in enforcing a loan. This means banks will no longer be able to call in a loan when small businesses are acting lawfully and making their payments on time, other than in exceptional circumstances.

“For new or renewed contracts, banks will expand the definition of small business beyond what is required by law so that ‘covenant light’ contracts apply to businesses with total loans under $3 million. This will be done by no later than the end of 2017.

“Banks will also give more notice to customers of changes to loan conditions and decisions on rollover.”

Ms Bligh said the industry supported the Ombudsman’s recommendations for more transparency around how banks work with small businesses.

“The ABA is working with stakeholders on developing best practice industry guidelines on bank valuation practices and the appointment of investigative accountants and receivers for small businesses and farmers.

“Nine of the eleven Ombudsman’s recommendations for banks are consistent with the findings of the independent review of the Code of Banking Practice1, and these new obligations will form part of the revised Code,” she said.

“The new Code will have a dedicated section for small businesses and require banks to simplify loan contracts so they’re written in plain English.”

More information, including a response to each of the Ombudsman’s recommendations, is available here.

ENDS

Contact: Stephanie Arena 0477 470 677 or Nic Frankham 0435 963 913

@austbankers

bankers.asn.au

Latest news

1 / 3
Transcript
Anna Bligh Interview with ABC Radio Brisbane, discussing future of cash and Digital ID
3 April 2024

Steve Austin  Well as you know, the Commonwealth Government has made it clear they consider access to cash a priority for the Australian economy and the country’s largest banks, as well as Coles, Woolworths, companies like Wesfarmers and Australia Post have been trying to put together a short term lifeline for Armaguard, who’s the company… Read more »

Read more
Transcript
Anna Bligh interview on Sunrise about the future of cash
3 April 2024

Natalie Barr  And to the cash emergency hitting our country. Emergency talks are being held this week, with our top banks preparing for a potential cash crash. It comes as Australia’s key money supplier Armaguard fights to stay afloat. Spearheaded by the Australian Banking Association, the banks are now pulling together a contingency plan to… Read more »

Read more
Media Releases
ABA statement on financial support for Linfox Armaguard
2 April 2024

The Australian Banking Association acknowledges Linfox Armaguard (LFA)’s statement that they won’t be taking up the offer of financial support from a collective of banks, retailers and supermarkets.    We welcome Armaguard’s commitment that they will continue to operate and have secured funds from their parent company to maintain their full suite of services.   Australia’s largest… Read more »

Read more