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MNB To Close Down Széchenyi Commercial Bank

Tamás Székely 2014.12.08.

The National Bank of Hungary (MNB) withdrew the operating license of Széchenyi Commercial Bank and ordered it to wind up. The central bank and financial market regulator’s commissioner has overseen Széchenyi Commercial Bank’s activities since early in November. A withdrawal cap was introduced for clients, but the banks’ owners were prohibited from taking money out of deposits.

The central bank said Széchenyi Commercial Bank’s operations did not conform to legal requirements and it had failed to comply with the oversight resolutions. Allowing the bank to continue operating would have endangered the interests of its clients and the fulfilment of its obligations. The bank has some 1,600 depositors who will be compensated up to 100,000 euros by the National Deposit Insurance Fund.

Meanwhile Hungary’s Competition Office (GVH) said it had fined K&H Bank 80 million forints for misleading advertising. GVH levied the fine for a month-long ad campaign of KSH’s “MIX” product early in 2014. KSH advertised a 7.80% annual return on the product – well over the market rate – but failed to make clear that the rate was paid only on the one-third of savings that were placed in a deposit. The other two-thirds were put in a closed-end investment fund or life insurance policy.

via hungarymatters.hu photo: szechenyibank.hu