Northern Ireland’s banks have been accused of fleecing farmers by putting up interest rates on their overdrafts despite the plunge in the base rate to an all-time low.
Farmers owe over £800m to the commercial banks but are not benefiting from the reduction in interest rates that should go hand-in-hand with the drop in Bank of England base rate to the historic low of just 0.5%, according to the Ulster Farmers’ Union.
UFU president Graham Furey branded the situation unacceptable.
Mr Furey welcomed the Bank of England’s latest reduction in interest rates, but said it would only be beneficial if the local commercial banks passed on the benefits.
“The whole issue of the cost of banking is now being highlighted by farmers. In many instances when farmers have been re-negotiating their overdrafts the cost of borrowing has actually gone up.
“Our members have complained that arrangement fees for loans and bank charges have also been increasing. These are issues which we don’t find acceptable.”
He revealed: “Farmers owe over £800m to the commercial banks in Northern Ireland so banking is a big issue for almost every local farm business.
“We are monitoring very closely what is happening in the banking sector.
“Many farms are going through a difficult period, particularly in the dairy sector, and commercial banks must be aware of farmers’ views that they shouldn’t be pushing up the cost of banking at a time when the Bank of England is trying to lower the cost of borrowing to kickstart economic activity.”\[Prestige\]Story 'Farmers banks' fetched from queue '