National Deposit Insurance Funds pays out HUF 90 bln this year
Not sharp!
Hungary's National Deposit Insurance Fund (OBA) has paid out almost HUF 90 bln to the clients of three failed savings cooperatives this year, up from HUF 76.6 bln in 2013, Hungarian business daily Világgazdaság reported today.
In the event that another bank goes bankrupt and OBA runs out of money, the law allows OBA to borrow to compensate depositors, the paper said.
In this case, OBA would first turn to the National Bank of Hungary for credit, the fund's communications director told the paper. The amount would have to be repaid within three months, thus OBA would tap the market for credit.
At present, lenders pay 1% of the total deposits covered by OBA (which equals to €100,000 per depositor), but the rate may be raised to 2% or 3%, according to the law.
Deposits covered by OBA at the end of last year came to HUF 8,753 bln.
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