First MNB decree on borrowers' refunds published

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A central bank decree regulating the basic methods for calculating compensation banks must pay under borrowers' relief legislation approved in the summer was published in the official gazette Magyar Közlöny on November 7, Friday. 

The decree was approved by the National Bank of Hungary's Financial Stability Council on November 4. The decree allows lenders to choose one of three separate methods for calculating the compensation which is to be deducted from borrowers' repayments. The appendix of the decree gives the detailed formula for the calculations.

On Monday the MNB noted that all three methods produced the same results, putting borrowers at no disadvantage. The decree will take effect on the day next to its publication. It will be followed by three more decrees in the second half of the month. The second decree on the compensation will cover loan contracts affected by preferences and on which borrowers fell behind on repayments, both cases which are not covered by the first decree.

The third decree will cover a calculation method to be used by lenders that are winding up or are under liquidation. It will also lay down the settlement date and the deadline for paying the refunds, the MNB said. The fourth decree will regulate how banks must inform borrowers. The borrowers' relief legislation requires lenders to refund borrowers for using exchange rate margins when calculating repayments for foreign currency-denominated loans and for making unilateral changes to both FX and forint loan contracts.

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