NAB cuts penalties for farmers

NATIONAL Australia Bank will stop charging farmers extra for defaulting on loans during droughts, after the financial services royal commission heard how the lender had heaped pressure on rural borrowers.

Farm banking in hot, dusty Australia has long been tough and, although it is a small component of overall books, rural loans are some of the riskiest and most politically sensitive.

NAB’s move, which also includes offering access to discount loans to farmers, is the latest from banks scrambling to tighten lending and reform their own practices ahead of expected recommendations for stricter regulation of the sector.