Hungarian banks should offer free transfers: central bank officials

BUDAPEST (Reuters) - Hungary’s central bank expects local banks to provide retail clients with free transfers, two central bank officials wrote in an article published on business news website on Thursday.

The National Bank of Hungary (NBH), which also oversees financial sector regulation, has long argued that banking in Hungary was too expensive and there were too many big lenders in the country of less than 10 million people.

Banks have argued that they face rising costs due to taxes, wages, compliance and information technology investment.

“The (NBH) handles this as a special priority and will use all tools at its disposal to achieve this objective,” central bank officials Lajos Bartha and Lorant Varga wrote in the article.

A government tax on financial transactions is expected to raise 226 billion forints ($757 million) this year.

A spokeswoman for the Hungarian Banking Association could not comment immediately on the possible financial impact of the changes if banks were forced to offer free transfers.

Hungary is preparing to launch an instant-payment system in March which will enable prompt domestic bank transfers for retail and corporate clients.

“From a technological aspect, instant payments can provide an alternative to cash payments in any scenario,” the central bank officials said.

“However, its widespread use can only be implemented if similar to cash and card purchases bank transfers are also free of charge,” the central bankers said.

($1 = 298.63 forints)

Reporting by Gergely Szakacs and Krisztina Than; editing by Jason Neely