TWO of the big four banks were initially reluctant to take part in an industry-promoted scheme to help the newly unemployed and families suffering hardship by postponing their mortgage payments for up to a year until the Federal Government picked up on the idea.
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The original plan to extend existing ad-hoc arrangements was put to the banking sector's lobby group by the Commonwealth Bank chief executive, Ralph Norris, several weeks ago in an effort to get a united response to the growing financial problems faced by the jobless.
It is understood Mr Norris came up with the scheme in January to formally defer mortgage and car loan payments for 12 months but held off announcing it on behalf of his bank because of the huge work generated by the Victorian bushfires.
He then put it to the Australian Bankers Association, of which he is chairman, but because two of the banks indicated that their financial hardship schemes already covered what he had proposed, agreement could not be reached for a joint announcement.
Mr Norris then went public with the Commonwealth's own proposals on March 17, which subsequently prompted the Federal Government to pick up on the idea and get ANZ, Westpac and National Australia Bank to repackage their hardship measures.
Westpac and its subsidiary, St George, yesterday extended their financial support programs to small businesses, which will offer reprieve to customers through its Assist scheme with extended loan terms and putting repayments on hold for up to a year.
Westpac's chief executive, Gail Kelly, said: "The last thing we want as banks is to have customers that are in financial hardship feeling they have nowhere to go."
Ms Kelly denied the financial hardship measures adopted by the banks were designed to stave off competition from smaller banks and non-bank lenders.
Westpac's announcement was accompanied by a similar assistance package from ANZ while Abacus, the industry body representing credit unions and building societies, said it was encouraged that the banks were extending hardship schemes that its members already had in operation.
