MNB allows NPL adjustment for MLS participants
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The National Bank of Hungary (MNB) will allow banks participating in the Market-Based Lending Scheme (MLS) to ignore repayments on non-performing loans when calculating SME outlays, the central bank announced today, according to Hungarian news agency MTI.
Lenders whose SME outlays reach 50-100% of commitments made under the MLS are allowed a 20%-75% reduction in their capital reserve requirement for the credit. Lenders who reach or exceed their commitments are allowed to reduce the capital reserve requirement on the credit by up to 100%.
The MNB is allowing banks to ignore the negative impact of NPL repayments on their SME lending performance at the request of lenders.
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