Dairy Holdings, Fonterra's biggest supplier-shareholder, has warned of a "perfect storm" developing if the Reserve Bank's capital adequacy proposals go ahead in their current form, and said some banks were already charging a margin in anticipation of the change.

The family-owned company, which has 75 farms in the South Island and 50,000 cows, has made a case for the new rules being introduced over a longer time span than the proposed five years, or with at least an option to extend the time period if required.

"Dairy Holdings sees significant risk in the perfect storm materialising where banking margins increase

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