Thirteen Hungarian banks on Wednesday signed a code of conduct that will affect the entire scope of their lending activity. The code will take effect on December 1, Prime Minister Gordon Bajnai said after the signing.
Financial market regulator PSZÁF will be entitled to impose a fine of up to HUF 2 billion on financial institutions breeching the code, Bajnai added.
Acting president of the Hungarian Bank Association Mihály Patai said the code of conduct aims at strengthening confidence between the banking sector and its clients.
The code of conduct is expected to be extended to all institutions operating on the retail lending market in the future, PSZÁF head Ádám Farkas said.
Farkas said the signing of the code is voluntary, and the code does not restrict competition between banks. Banks have undertaken not to implement any unilateral amendments to their contracts until the code takes effect, he added.
The code of conduct affects information banks provide to borrowers, preparations to be made before loan contracts are signed, management of problem loans, and unilateral changes to contracts and bank fees.
The code of conduct was signed, after much debate, two weeks later than planned. Banks agreed with the government to draw up the code in the middle of July and had expected to sign the document by September 1.
The code was drawn up together with PSZÁF. PSZÁF head Ádám Farkas confirmed on Monday that an agreement on the text had been reached at expert level. The next day, Hungarian Bank Association president Péter Felcsuti announced his resignation from the post over differences with other members. (MTI-ECONEWS)