(Budapest, June 20, 2012)
The National Deposit Insurance Fund of Hungary (NDIF) starts indemnifying the depositors of Soltvadkert és Vidéke Takarékszövetkezet (Savings Association) on this day and it will complete this process within 20 work days. As part of the compensation process, the depositors (be they private individuals or business entities) may receive an indemnity of a maximum amount equivalent to 100 thousand euros, i.e. 28,962,000 HUF per capita.
With effect from June 1, 2012, the Hungarian Financial Supervisory Authority withdrew the operating license of Soltvadkert és Vidéke Takarékszövetkezet, and at the same time, it ordered the windup of the institution. As a result of the amendment of Act CXII of 1996 on Credit Institutions and Financial Enterprises (Hungarian acronym: Hpt) announced on June 19, from this day, NDIF was authorized to start the process of compensating the depositors not only in cases of orders for liquidation but also those for final settlement. This amendment allows the intervention of NDIF already in the current process of final settlement of the Soltvadkert Savings Association.
“From this day, the depositors do not have to queue for receiving their money, they do not have to specifically apply for a NDIF compensation, as it is automatic. Private individuals will receive their money up to a limit of one million Forints in their homes, according to the delivery rules of the Hungarian Post Office, it is only those depositors who have amounts higher than this that will have to visit the branches of one of our contributing partners, i.e. the Hungarian Post or OTP Bank”, said NDIF’s Managing Director Mr. András Fekete-Győr.
In order to ensure indemnification as quickly as possible, NDIF performs payments through three different channels:
Modes of indemnifying private individuals:
- Deposits below 1 million Forints – to be delivered by the Post. By using postal payment orders for those private individuals in the case of whom the amount of indemnity does not exceed 1 million Forints
- Deposits between 1 and 5 million Forints – through the NDIF Deposit Insurance Card. The depositors will first receive the PIN codes necessary for using the cards, by post, then the letter containing the card, and finally the payment settlement will be delivered to them. The letter containing the card will also contain some guidance for using the card. In order to be able to use the card, a depositor will have to receive all the above-mentioned letters (those containing the PIN code, the card, and the payment settlement), as the settlement contains some information necessary for activating the card. The card can only be used for receiving the amount of the indemnity and not for any purchases.
- Deposits over 5 million Forints – with the involvement of OTP (as a paying agent). For cash security reasons, indemnity amounts exceeding 5 million Forints may only be accepted and disposed of at the branches of OTP Bank. In the letter attached to the payment settlement, NDIF provides detailed information on the to-do’s of a depositor on accepting the amount of the indemnity. Then depositors should visit the nearest OTP branches (the list of recommended branches is available on the homepage of NDIF).
High amount cash withdrawals and placements of deposits may incur security risks, this is why NDIF warns its clients to act with utmost caution.
- Irrespective of the affected amounts, legal entities and unincorporated business associations, other organizations and sole traders may get access to their amounts of indemnity according to the rules of opening corporate accounts, after receiving the payment settlements and the guidance by post, after their having contacted OTP Bank as a paying agent.
NDIF discloses an announcement regarding the indemnification. You can find the announcement at the branches and on the homepage of the Savings Association, as well as on the homepage of NDIF (OBA) (www.oba.hu), furthermore, you can also find it in the national daily papers Magyar Nemzet, Népszabadság and Petőfi Népe (regional daily) tomorrow. You can call NDIF’s discount rate round-the-clock customer service at the blue number +36-40-918-918, which will be available to the clients during the entire period of the indemnification.
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To the editor
The bank deposits placed in credit institutions registered in the territory of the EU are insured by the national deposit insurance institution established in the country of incorporation. Since 1993, all the credit institutions (banks, savings associations, credit unions, home savings funds) holding an operating license in Hungary have been obliged to join NDIF and pay accession and annual fees. The key responsibility of NDIF, which supports the stability of the Hungarian banking system, is to indemnify depositors from the accumulated funds in the case of frozen deposits. See the valid rules of deposit insurance on the homepage of NDIF (www.oba.hu), in the downloadable client information publication entitled “Compass to Deposit Insurance”.
In the case of closing a credit institution (commonly known as bankruptcy), the eligible depositors are indemnified by NDIF within 20 work days, aggregately by private individuals and credit institutions, up to a maximum amount of 100 thousand euros. The indemnity paid in Forints in each case refers to both the principal and interest amounts of the frozen deposits. Brief information on the process of indemnification is available on the homepage of NDIF.
NDIF has concluded master agreements for participation as paying agents with several credit institutions with official seats in Hungary and with extensive branch networks. This means that the paying agent(s) contribute(s) to the process of indemnification with their payment functions in the case of mass payments. The clients may withdraw the amounts maintained for them from the paying agent in cash, they may place these amounts as deposits or as other savings products at the bank, or they may transfer these amounts to a bank account that they have opened. The clients should visit one of the branches of the paying agent.
NDIF customer protection logo
The bank products provided by NDIF are easy to recognize from the deposit insurance customer protection logo to be mandatorily used from March 1, 2012. The application of the logo is controlled by NDIF during its credit institution audits and it is also monitored by the Hungarian Financial Supervisory Authority: http://www.oba.hu/hu/tagintezeteknek/fogyasztovedelmi-emblema.
NDIF member institutions
On May 31, 2012, NDIF counted as many as 164 member institutions, namely 3 home savings funds, 4 credit unions, 31 banks and 126 savings associations.