Betty owns and operates a childminding business. Her business has prospered for some years, earning approximately $1,000,000 in annual profits, and she made plans to expand, including building a new centre in Hawthorn estimated to cost $2,000,000 on completion. She borrowed $1,000,000 from Second National to pay for the centre. Her business deteriorated when Covid-19 restrictions came into effect in 2020-2021, and all construction work came to a halt. Betty approached her bank, Second National, asking the bank to suspend loan repayments until after the Covd-19 restrictions were lifted. They refused to do so unless the loan plus interest must be repaid within 5 years. If not, then Second National would take ownership and control of the business completely.

Advise Betty.

Multiple choices

(a) Second National's request above will breach the Code of Banking Practice.

(b) Second National's request above would be unconscionable.

(c) Second National's request above complies with the Code of Banking Practice and is not unconscionable.

(d) None of these answers are correct.