Banks’ proposal failed to remedy the two most important problems in the government’s view, Varga said. The government will draft legislation that represents the interests of borrowers, he added.

Hungarian Banking Association chief secretary Levente Kovács said on Saturday that the professional body had submitted their proposal to the government on Friday, before the November 1 deadline.

Varga told MTI the government had received the letter from the association, but said talks on a solution between banks and clients should have started first.

“There was no word of modifications to contracts; the banks did not apply decisions taken by the [supreme court] to the contracts, even though there would have been no legal barrier preventing this,” he said.

Varga reiterated that the government aimed to phase out FX loans and to prevent borrowers with forint loans from ending up worse off than ones with FX loans.

“Because the banking association’s proposals do not solve these problems, the government will submit its proposals to Parliament early in November,” he said.