Banking Regulations in Hungary

Summary of Key Points

• A foreign bank or financial institution can operate in Hungary based on its domestic license.
• There are no restrictions on ownership, including foreign ownership of banks.
• Acquisitions of qualified holdings in banks require approval from the National Bank of Hungary.

Detailed Response to Questions

Can a Foreign Bank Operate in Your Jurisdiction on the Basis of Its Domestic License?

Yes, a foreign bank can operate in Hungary based on its domestic license either (i) on a cross-border basis or (ii) through its Hungarian branch. The foreign bank must notify its home regulator and the National Bank of Hungary in advance.

Can a Foreign Financial Institution Other Than a Bank Operate in Your Jurisdiction on the Basis of Its Domestic License?

Yes, a foreign financial institution other than a bank can also operate in Hungary based on its domestic license, provided it meets certain requirements defined in Hungarian laws.

What Are the Restrictions on Ownership, Including Foreign Ownership of Banks?

There are no restrictions on ownership, including foreign ownership of banks.

Requirements for a Proposed Acquisition and Acquirer of a Qualified Holding in a Bank

The acquisition of a qualifying holding in a bank requires approval from the National Bank of Hungary. The person acquiring a qualifying holding must meet certain requirements, including being independent, having a good business reputation, and being capable to maintain reliable leadership and control over the bank.

Procedures for Notification and Authorization

The foreign bank or financial institution must notify its home regulator and the National Bank of Hungary in advance of its intention to operate in Hungary. The National Bank of Hungary will then inform the relevant institution regarding regulations pertaining to consumer protection and other general goods regulations.