Court rules against bank in forex loan case

MNB

A single case involving forex-based loans has been ruled upon and with some 2,500 more lawsuits awaiting judgment, a precedent could well have been set: A lower court in Budapest yesterday ruled that a foreign currency-based loan provided to a private party by an unnamed bank was invalid due to improprieties in the terms of repayment.

According to a Reuters report, “When the loan was disbursed, the bank used its buying exchange rate for the conversion from forints, while monthly repayments were calculated based on the bank’s selling rate.”

On Monday, Kúria judges are scheduled to discuss the issue of forex-based loan contracts, per Prime Minister Viktor Orbán’s mid-November urging of the court to provide a uniform ruling before a bailout plan for borrowers is implemented.

Reuters also reported on Friday that, according to their sources in the Justice Ministry, “the government aim[s] to draft a bill to phase out foreign currency-based mortgages once top courts deliver their verdict on the loans, which the cabinet hopes could come as soon as this month.”

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