Banks set to introduce new ways to lend money and a better means of credit management.
The new bank lending system which was originally planned in 1969 comes into place on 1 April sees the introduction of term lending. It will mean the replacement of overdrafts with term loans.
Dr TK Whitaker Governor of the Central Bank explains how the new system of bank loans works. He points out some of the flaws with the overdraft system as it does not specify the purpose or period of borrowing and is an ineffective means of credit management.
The Central Bank is interested in it (new loan system) because we think it's advantageous to the public in general.
Banker Frank O'Rourke explains the workings of the new system which he believes will create a greater flow of credit in the economy. The credit provided will be dependent upon ability to repay and the duration of the loan. If a customer is unable to repay a loan within the agreed term, they will need to renegotiate the terms of the loan with the bank manager.
An RTÉ News report broadcast on 16 March 1972.
