Bank Account Holders in Hungary: Protect Your Account Balance and
Qualify for Deposit Insurance Repayment When Banks Fail or Stop
Hungary is an east-European country and EU member state since 2004. The country became a satellite state of the Soviet Union after the end of the Second World War where socialism prevailed. At the end of the Soviet era, Hungary made a transition from a centrally planned economy to a capitalist society with a free market economy that heavily relies on foreign trade. Over time, this bumpy ride resulted in a high-income, mixed economy with high human development, skilled labor and private ownership. Agriculture provides the main natural resource for exportation while electronics manufacturing and research drive innovation and growth. Economic drivers are heavy industry, chemicals, food, automobile production, tourism and the services sector.
The Hungarian Economy and Financial System
Foreign direct investment was mainly attracted by the privatization of state enterprises and furthered by the advancements of the services sector. Contrary to most other countries in transition, Hungary decided to sell state ownership to settle its substantial foreign debt. Fiscal stimulus for corporate and environmental projects laid a solid foundation for domestic economic growth and stability by experienced foreign investors. Traditional public overspending remains a struggle popping up in times of economic distress, as indicated by the recent Covid health crisis.
The financial sector in Hungary connects several market players and industries and therefore affects the development of the national economy. Technological innovation in the financial industry is needed to conform with local and international standards and enable swift transactions. Capital requirements and (market) risk management are paramount as maintaining confidence in the banking sector is in the common interest of all economic players and decision-makers.
Banking and Finance in Hungary
In Hungary, only credit institutions can accept deposits. These credit institutions are licensed by the National Bank of Hungary and are often called banks. There are currently 41 licensed credit institutions in the country, of which 21 are commercial banks, 8 foreign bank branches, 5 mortgage banks, 4 building societies, and 3 specialized banks. Banks and credit institutions domiciled and licensed in Hungary are required to participate in the Hungarian deposit insurance system, the National Deposit Insurance Fund (OBA). Members of the OBA make financial contributions to the fund to secure the repayment of secured account balances to registered account holders.
Bank Deposit Protection in Hungary
Deposit insurance and investor compensation protect the assets of registered creditors of supervised deposit taking credit institutions. In Hungary this is executed by the National Deposit Insurance Fund (OBA) and the Investor Protection Fund (BEVA). According to European guidelines, these funds cover a maximum of 100.000 euro and 20.000 euro, respectively. Bank deposit protection in Hungary exclusively applies to registered deposits held by verified account holders.
Hungary has a history of banking failure. In the wake of the European debt crises, 10 credit institutions were liquidated. A distinction is visible in the deposit amounts held with regular credit institutions and international private banks. The maximized coverage of bank deposit protection is more than enough for most registered account holders. Their balance is lower than the insured amount.
A Straightforward Indemnification Process for Deposit Insurance
When a supervised credit institution in Hungary fails and intervention is needed to protect depositors and maintain financial stability, an important role is played by the National Deposit Insurance Fund. The fund is activated when the supervisory authority withdraws a license of a registered credit institution or the court orders its closure. Reimbursement of registered account holders follows a straightforward procedure:
- Day 0: The resolution serving as a basis for compensation payment is published.
- Working Day 1-2: NDIF informs the general public about the details of compensation payment.
- Working Day 1-5: In the meantime the saved customer data are processed in the center of NDIF.
- Working Day 5-15: NDIF starts the compensation pay-out process.
- Working Day 16: The aftercare period begins.
Contact us for More Information and to Discuss Your Case…
This website is an initiative of Legal Floris LLC. We assist international creditors recover money when their bank fails or their investments disappears. Due to our vast experience in bank failures in different countries, we are able to maximize repayments and minimize risks for our clients. Contact us right now to find out how we can help you too to reclaim your account balance if your bank in Hungary stops operating:
- Visit: www.depositguaranteeclaim.com/free-case-evaluation
- Call: 00357 25 057 544 or 001 646 513 2855
- Email: [email protected]
- Complete the contact form below: