Large Australian banks have announced that eligible mortgage holders can delay repayment by up to six months. Per The Sydney Morning Herald. The country's four major established banks – ANZ, Westpac, Commonwealth Bank of Australia (CommBank), and National Australia Bank (NAB) – said customers who are experiencing financial difficulties due to the pandemic should contact them for possible delays in the To discuss repayment.
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This is an extension of a previously announced plan by the country's banks that introduced a three-month deferral. Some established companies are considering additional precautions: For example, CommBank can lower the interest rates on its credit cards to reduce the financial burden on customers during the coronavirus crisis. Per Savings.com.au.
Australian regulators and banks appear to be following the leadership of the United States, the United Kingdom and other regions in mobilizing in response to the coronavirus. Last week, New York governor Andrew Cuomo announced that New Yorkers can Break Mortgage repayments for a period of up to three months as well as overdraft fees, credit card and ATM fees are eliminated. And the Bank of America (BofA) announced customers and small business customers affected by the coronavirus can inquiry a credit deferral under the customer support program.
In addition to the noticeable positive effects of reducing the financial burden on customers, the Big Four's relief efforts could strengthen the reputation of established companies. This is crucial as the market is increasingly crowded with challengers. Granting additional deferrals could help banks limit late payments on mortgages, credit card payments, and other loans – and these defaults are likely to be increase in the coming months given the impending economic recession.
In addition, the goodwill that a bank generates by supporting customers could remain even after the current crisis has subsided. This is particularly important, as Australia has seen influx In recent years, high-profile neo-banks – such as 86 400 and Xinja – have entered the room and challenged the Big Four with higher interest rates and free offers. Increasing customer loyalty could help established companies keep more customer bases given the threat posed by neo-banks.
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