Rabobank gets rid of clients who do not take loans

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Rabobank will only offer transaction accounts to its rural clients.

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Rabobank will only offer transaction accounts to its rural clients.

Agribusiness specialist Rabobank is rejecting clients in New Zealand who have transaction accounts but not rural lending.

A bank spokesman said the bank had informed affected customers of the change earlier this month and is working with an unspecified number to help them switch to another bank.

The decision was made to allow the bank to focus on lending to food and agribusiness customers and online savings customers, he said.

“As a specialized food and agribusiness bank, our core business in New Zealand is lending to farmers and producers,” the spokesperson said. “We recently reviewed our customer account arrangements to only offer transactional banking services to customers who are associated with us in rural lending.

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“We understand that this change may be frustrating for some customers, and we will continue to work with affected customers to help them move to a bank offering suitable retail products.”

JOHN KIRK-ANDERSON / STAFF

George Black ran 100 kilometers in rubber boots to raise funds for the North Canterbury Rural Support Fund, which supports flood-affected Canterbury farmers.

Rabobank expects to complete the withdrawal of these clients from its ledgers “in the coming months,” the spokesman said.

Banking specialist from Massey University Professor David Tripe said that banks did not make money from transactional accounts, and it was a service they provided in the hopes of getting some other business.

“Rabo’s strength is rural lending, not transaction account management,” said Trip. “Keeping checking accounts for people who don’t have it is not a particularly financially beneficial aspect of the business, so if they can leave that behind it won’t upset them.”

According to him, like any other business, banks have the right to declare that they do not want anyone to be their client.

Tripe said most farmers probably have some kind of debt, although this depends on the circumstances and smaller farms or older farmers may be debt free.

Rabobank’s decision could be challenged low interest environment This means that having customer deposits in operating accounts was less profitable, he said.

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