OTP Bank on Monday signed an agreement with the local council of Pécs (SW Hungary) to raise its overdraft limit from HUF 5 billion to HUF 7 billion.
Raising the limit was necessary to ensure the operation of the local council and strengthen its economic position. Property owned by the local council was put up as collateral.
Mayor Zsolt Páva said the city would avail of the new overdraft limit only if liquidity dried up. The agreement ensures that financing and organizing programs for 2010, when the city takes the European Capital of Culture title will not be a problem.
The local council takes in about HUF 40 billion a year, not including support for European Capital of Culture projects, and it has about the same amount of debt, Páva said. It has become more difficult to get credit in recent years, he added. (MTI-ECONEWS)