Fed Farmers attack banks for not passing on all of wholesale rate cuts

Federated Farmers attacked banks again on Monday for not passing on all the recent cuts in wholesale and official interest rates to farmers' overdraft rates, saying banks appear to be offering much lower home mortgage rates at the expense of high business and farm overdraft rates. Federated Farmers said a survey of 123 members in February found that their average business overdraft rate had been reduced by 54 basis points since the end of January to 9.62%. "Since 4 December 2009, 300 basis points have been cut from the OCR and 90 day interest rates have fallen from 5.36 percent to 3.04 percent. Yet farm businesses, on average, have seen only 156 basis points of this translated into their overdraft facilities," said Federated Farmers President Don Nicolson. "With further steep cuts to 90 day interest rates in recent weeks, the banks must urgently review their lending rates and quickly implement any cuts," Nicolson said. Federated Farmers pointed out residential mortgage rates had fallen 414 basis points since August last year. "Although we are not strictly comparing like with like, farmers are concerned that residential mortgage holders are enjoying the fruits of intense competition while farm businesses are not," Nicolson said.