BANK REPORT Overdrafts Decline

Press, Volume CIX, Issue 32020, 21 June 1969, Page 20

BANK REPORT Overdrafts Decline

Bank overdrafts declined during May as the business sector continued its seasonal adjustment to the March tax period, the research office of the New Zealand Bankers’ Association reports.

Advances and discounts totalled ss7om on May 28 compared with $573m on the last Wednesday in April. The special short-term borrowing arrangements with the Reserve Bank to assist the banks’ liquidity over the tax drain period were still in effect at the end of May. The amount involved was sl3m.

As a result of continuing official restraint on bank lending, which was fully maintained over the last nine months, low priority lending during April and May was below 1967 levels.

Expanded priority lending to farmers and export industries fully accounted for the limited growth of overdrafts since 1967.

The small rise of s4m, to sB29m, recorded for total credit limits, was a further indication of the continuous firm restraint being exercised particularly in view of the rising tempo of business activity, the office said. Deposits s7B7m Bank deposits totalled s7B7m at the end of May, a rise of sssm from a year earlier, and interest bearing deposits rose by s33m. Deposits in trading banks’ savings banks continue to expand steadily at approximately slm a week. They stood at $296m at the end of May.