Livestock marts are faced with new bills of up to €30,000 due to new rules being applied by banks to deposits held in client accounts.

Negative interest rates are being charged on funds maintained in client accounts.

With marts obliged to hold enough money on account to cover their daily trading, the cost of negative interest rates being charged on that money could be as high as €25,000 to €30,000 for marts with a significant turnover.

Ray Doyle, ICOS livestock executive, said marts recently received correspondence from banking institutions informing them that the previous threshold of €4m in place before charges were applied has now been reduced to €1m.

Negative interest rates ranging from 0.5% to 0.65% will now be applied to all funds exceeding €1m.

To comply with Property Services Regulatory Authority (PSRA) rules, marts must maintain sufficient funds in their client account to cover the value of all animals traded in a sale, along with any other liabilities outstanding from cheques not being cashed from previous sales.

ICOS has been in discussions with the PSRA to intervene with the banks and Government

“Most mart client accounts could manage with the previous €4m threshold, but the €1m threshold is much more restrictive and will lead to a significant addition to the cost of operating a mart,” Doyle told the Irish Farmers Journal.

“ICOS has been in discussions with the PSRA to intervene with the banks and Government. Unfortunately, we have been told by the PSRA that it is a matter for the European Central Bank and that all client account holders must ensure all funds due to clients are in their account.”

One mart manager told the Irish Farmers Journal that their business has seen a swing from positive interest rates, contributing in excess of €100,000 to the business when banks were strapped for cash during the financial crisis, to now looking like it will cost the business between €25,000 and €30,000.

They said that when this cost is added to insurance costs and council rates, both of which have also increased for the mart in recent years, there is a substantial bill to cover before the mart ever trades an animal.