The number of customers contacting their bank has increased 20% since New Zealand went into Covid alert level 4 lockdown on 17 August.
“In the first week of lockdown banks saw little customer contact due to the Covid restrictions. Since then, calls have increased on average 20 per cent. We put the increase down mostly to people experiencing uncertainty,” says New Zealand Bankers’ Association chief executive Roger Beaumont.
“While it’s true there are some people experiencing financial hardship because of the current lockdown, we’re not seeing the same demand for help we saw with the first lockdown in March last year.
“Last year, under the loan repayments deferral scheme agreed with the government, Reserve Bank and credit rating agencies, around $70 billion in household and business loans had repayments fully deferred or reduced for up to six months. We’re not seeing the need to bring back the scheme at this stage but deferring or reducing repayments remain a potential option for people in hardship, on a case-by-case basis.
“Anyone experiencing financial difficulty because of the current lockdown should contact their bank to discuss how they can help. Banks can offer a range of options for customers facing hardship, depending on their circumstances.”
Ways that banks could help include:
- Temporarily suspending both principal and interest loan repayments
- Reducing or suspending principal payments on loans and temporarily moving to interest-only repayments
- Helping with restructuring loans, for example extending the term of the loan
- Consolidating loans to help make repayments more manageable
- Providing access to short-term funding
- Referring individual customers to budgeting services.
“The sooner you contact your bank, the better placed they are to help.
“It’s worth checking your bank’s website to find out the best way to contact them at this time.”