The Board of the Hungarian Banking Association has decided to publish the following announcement concerning the extension of the loan repayment moratorium and the settlement of interest for credit cards and overdraft facilities.
The Hungarian banking sector supports the repeated extension of the moratorium subject to the introduction of the principle of “need”, accepting that this will impose a significant additional financial burden on banks. Aiming to supporting a rapid economic recovery that is also noticeable at the level of society, we agree that the extension of the moratorium should not apply to the entire customer base. The Hungarian Banking Association's recommendation remains that whoever is able to do so, should continue or start repaying their loans. Being under the moratorium means a deferral of payments, and any outstanding debt must be paid after the end of the moratorium. Starting loan repayments as late as possible will increase the financial burden and extend the repayment period.
Through its record-breaking lending activity in recent times, the Hungarian banking sector has done much to support the V-shaped recovery of the Hungarian economy, whilst not receiving any direct financial support, unlike other economic players. Since the beginning of the crisis, we have been saying that, first and foremost, we need to support our customers in need. This is the reason why the Hungarian banking sector has been supporting debtors for a much longer period of time and to a much greater extent than other countries in the region. In addition, in order to safeguard the economy, in mid-2020 we agreed to pay extra taxes of HUF 55 billion into the central budget.
Taking note of its contribution so far, the Hungarian Banking Association acknowledges the Government's decision of 15 September to settle the debt resulting from the moratorium in respect of credit cards and overdraft facilities at significantly reduced interest rates, as of 18 March 2020, but we consider it important to note that, due to the very characteristics of these products, since the beginning of the moratorium we have repeatedly drawn the Government’s attention to our position that credit cards and overdraft facilities should be left out of the moratorium. It is not fair to recalculate interest on these credit products retroactively, bringing them on a par with the interest rate of cash loans, as the interest rates and risks of the different products are also different. Interest was calculated in accordance with the contract, and banks acted in compliance with the law during the moratorium. The banking sector kept customers informed about the interest rate payable in respect of their debt accumulated under the moratorium, allowing them to make a responsible decision on whether they wished to stay under the moratorium. This decision will have a negative impact on the financial awareness of customers, and is also unfair to clients who did not opt for the moratorium, and are repaying their loans in a responsible manner.
The Hungarian Banking Association continues to consider effective co-operation between the Government and the banking sector to be essential for the successful restarting of the economy.
Budapest, 16 September 2021
The Board of the Hungarian Banking Association