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MNB in consultation with banking association on settlement decrees

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The National Bank of Hungary (MNB) is consulting banks regarding the decrees on the settlement of refunds to retail borrowers, MNB Director Balázs Vonnák told Hungarian news agency MTI.

The settlement law was passed late September after Parliament approved borrowers' relief legislation in the summer requiring lenders to pay refunds for using exchange rate margins when calculating repayments on foreign currency-denominated loans and for making unilateral changes to both FX and forint loan contracts.

The main principles of the settlement, with excess payment paid by borrowers considered as advance principal repayment, have been set in the law.

But specific cases require complex regulation that is why the MNB has been consulting the association, Vonnák said, noting that banks will have extensive knowledge of the methodology by the time the decree takes effect as a result.

The first MNB decree will take effect at the beginning of November after the law on settlement itself takes effect on November 1, Vonnák said confirming an earlier press report.

There will be one basic decree while the specific cases will be handled in separate decrees.

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