Restrictions on Ownership, Activities, and Services of Banks in Hungary
Introduction
The National Bank of Hungary has established various requirements and procedures for banks operating in the country. This section outlines the restrictions on ownership, as well as the limitations on lending, guarantees, securities, derivatives, investment activities, foreign operations, securitization, custodian services, alternative investment funds, crowdfunding, and e-money and payment services.
Restrictions on Ownership
Acquisition of a Qualifying Holding
The acquisition and increase of a qualifying holding in a bank are subject to similar requirements and procedures. The acquirer must notify the National Bank of Hungary in writing within 3 working days after reaching a qualifying holding.
- Requirements for Acquirers: The acquirer must fulfill the same requirements as the person having a qualifying holding, including being independent, having a good business reputation, being capable to maintain reliable and diligent leadership and control of the bank, and transparency in business connections and ownership structure.
- Notice Period: In case of an increase of a qualifying holding, the acquirer must notify the National Bank of Hungary two days prior to the execution of the agreement.
Foreign Ownership
The same procedures and requirements apply for both domestic and foreign persons acquiring a qualifying holding in a bank.
Restrictions on Lending
- Consumer Credit: Consumer credit and mortgage loans are subject to special provisions aimed at protecting consumers.
- Prudential Regulations: Certain types of transactions may be subject to prudential regulations as outlined by the National Bank of Hungary.
Restrictions on Providing Guarantees or Security for Loans
There are no specific restrictions on providing guarantees or security for loans, except that certain types of guarantees may be subject to prudential regulations as outlined by the National Bank of Hungary.
Restrictions on Acquiring or Holding Securities or Derivatives
- Prudential Regulations: Certain types of transactions may be subject to prudential regulations as outlined by the National Bank of Hungary.
Investment Activities Outside Ordinary Business
A bank must obtain prior approval from the National Bank of Hungary before engaging in any investment activity outside its ordinary business, except for securities and derivatives transactions that do not pose a risk to the stability of the banking system.
Acquisition or Holding Shares in Other Companies
- Prudential Regulations: Certain types of transactions may be subject to prudential regulations as outlined by the National Bank of Hungary.
Activities Outside Home Country
A bank must comply with the laws and regulations of the host country where it intends to operate, including any applicable licensing or registration requirements.
Foreign Banks Acquiring or Holding Shares in Domestic Banks
- Prudential Regulations: Certain types of transactions may be subject to prudential regulations as outlined by the National Bank of Hungary.
Securitization Activities
A bank must obtain prior approval from the National Bank of Hungary before engaging in any securitization activity, except for mortgage-backed securities that do not pose a risk to the stability of the banking system.
Acting as a Custodian or Providing Other Services
- Prudential Regulations: Certain types of transactions may be subject to prudential regulations as outlined by the National Bank of Hungary.
Alternative Investment Funds
There are no specific restrictions on a bank’s ability to engage in alternative investment funds, except that certain types of transactions may be subject to prudential regulations as outlined by the National Bank of Hungary.
Crowdfunding Activities
- Prudential Regulations: Certain types of transactions may be subject to prudential regulations as outlined by the National Bank of Hungary.
E-Money and Payment Services
A bank must obtain prior approval from the National Bank of Hungary before engaging in any electronic money or payment service activity, except for those activities that do not pose a risk to the stability of the banking system.