The Hungarian banking system is prepared for the extraordinary situation and the attached special measures such as the debt repayment moratorium, the Finance Minister said following a meeting with representatives of the Hungarian Banking Association.

Mr Varga said the debt repayment moratorium announced on Wednesday – as part of which the principal and interest payment liabilities of private individuals and businesses on loans taken out before 17 March 2020 will be suspended until the end of the year – will take effect automatically, and there is therefore no need for anyone to inform their bank of their intention to avail themselves of this option. Debtors are required to notify financial institutions if they wish to continue repayment under the original terms and conditions, without disruption, he added.

The term will be extended by the duration of the debt repayment moratorium, meaning that debtors will not need to be concerned about a rise in their instalments due to an unchanged term. The Finance Minister also said the government will remain in daily contact with the Banking Association, and will consult with them with respect to the regulations issued in government decrees and related positions.

In answer to a journalist’s question, the Finance Minister said the payment moratorium also extends to student loans. The relief offered to taxi drivers, he said, is not unusual in Europe; similar measures have been introduced elsewhere in Europe in response to the fall in demand due to the epidemic.

The communication of the Finance Ministry also mentioned, quoting Mr Varga’s words, that debtors are advised to request the continued payment of their instalments under the original contractual terms and conditions if there is no reason for the suspension of repayment.

The communication further stresses that Mr Varga said they had reviewed the state of the financial sector. The Hungarian banking system is stable, 2019 was one of the most successful years in the past ten years, and this is one of the reasons why the sector has enough scope for manoeuvring to take part in the measures adopted supportively.

The President of the Hungarian Banking Association asked customers not to contact their bank branches due to the measures announced on Wednesday. András Becsei said everyone will receive the necessary information in good time, and in order to replace personal customer services, credit institutions are creating facilities for electronic communication. The Banking Association is in the process of assessing the detailed regulations; however, they regard the suspension of debt repayments as a prompt and effective measure for alleviating the consequences of the epidemic, he added.

(Ministry of Finance/MTI)