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Tuesday, 17 May 1960

Mr HAROLD HOLT - Since 1952, there has been no directive of that character which would restrict advances to primary producers. On the contrary, the central bank has left the trading banks in no doubt of the importance it attaches to meeting the special needs of primary producers for bank credit. All the available evidence indicates that the trading banks are fully alive to this need and have conducted their lending policies accordingly.

The present position is that the banks have been asked to see that their lending policies provide for, in general, not more than a moderate expansion of bank credit over the current financial year. There are no specific directives to the banks concerning their advances to the primary sector, but the Reserve Bank has indicated that the banks should, as usual, give special consideration to any areas adversely affected by seasonal conditions. The only specific restriction of advances by the trading banks at the present time is that they have been asked to continue to refrain from granting advances for the expansion of hirepurchase and instalment selling and to avoid giving any stimulus to speculative tendencies.

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