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Ministry denies agreement with banks on troubled borrowers (reacts on former item on 35% cut of banking tax in 2013)

The National Economy Ministry and the Hungarian Banking Association have not yet reached an agreement on troubled borrowers, and the information carried by the business website mfor.hu is totally unfounded, the ministry said in a statement on Tuesday.

Mfor.hu reported earlier on Tuesday that a 35% cut of the special banking tax to HUF 117 billion for the year 2013 and by another 35% to HUF 76 billion for the year 2014 were part of an agreement signed last week.

Mfor.hu said it obtained the minutes of the agreement signed by banking association head Mihály Patai and National Economy Minister György Matolcsy. It said that the dateline of the document indicated that it would be officially signed sometime in May.

Hungary's updated convergence program, submitted to the European Commission in April 15, projected harmonization of the banking tax with European Union practices from 2013 on after keeping it at an unchanged HUF 180 billion in 2012. The government earlier planned to halve the tax to slightly more than HUF 90 billion from the year 2012 on.

Other parts of the agreement cited by the website including the gradual lifting of the moratorium on auctioning property related to home loans as of July 1, 2011, the availability of state-guaranteed forint loans to borrowers without arrears to finance the rise of their fx-denominated loan if the HUF/CHF rate exceeds 190, the option for certain borrowers as well as for the bank to initiate the sale of the property to local councils at a deep discount, and making an increase n SME lending deductable from the base of the special bank tax.