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Hungary's banks must reimburse clients by February -lawmaker
September 4, 2014 / 11:01 AM / in 3 years

Hungary's banks must reimburse clients by February -lawmaker

BUDAPEST, Sept 4 (Reuters) - Hungary will make banks repay borrowers by the end of February for loan charges the government and the courts have found unfair, a top lawmaker of the ruling centre-right Fidesz party said late on Wednesday.

Fidesz has pushed banks to justify past unilateral contract changes or repay resulting fees, as well as recalculate conversions of household loans denominated in foreign currencies. The fee repayments could cost banks up to 900 billion forints ($3.78 billion US dollar), according to an estimate by Hungary’s central bank.

The country’s top court ruled in June that banking practices had been unfair in some cases and the banks now have one last chance to challenge the findings.

Antal Rogan, leader of the Fidesz parliamentary group, told Echo TV that details for the repayments would be worked out by the government this month, adding that it is likely that customers will have outstanding loans reduced rather than receive cash payments.

Reimbursements will begin after the legal challenges have been concluded, Rogan said, adding that customers’ loan repayments could drop by 25 percent on average.

“I expect that banks will be held to account by February at the latest,” Rogan said.

He said that the courts are likely to uphold previous decisions and that banks that fail to comply with their legal obligations will be fined heavily.

Rogan also reiterated that once the 600,000 foreign currency loan holders are reimbursed, the government will address forint-denominated loans as well, including general household loans and car finance.

“Banks will have to account for every penny in every single contract,” he said.

Hungary’s top banks are OTP, as well as local units of Belgium’s KBC, Italy’s Intesa Sanpaolo , UniCredit, Austria’s Erste and Raiffeisen. (1 US dollar = 238.3500 Hungarian forint) (Reporting by Marton Dunai; Editing by David Goodman)

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