The speedy indemnification based on SCV data
The depositors of Soltvadkert és Vidéke Savings Association, u.d. were indemnified by the National Deposit Insurance Fund (NDIF) faster than ever. 98.4% of the depositors got access to their savings placed with the savings association within 10 work days. As a result of the fast NDIF indemnification, the majority of the depositors already received their funds within 20 work days from the enactment of the process on June 1, 2012.
Based on its contract entered into with the Hungarian State, NDIF can shortly start paying out the state-guaranteed deposits worth some 16 million Forints placed prior to July 1993.
For the overwhelming majority of the 15,332 depositors of Soltvadkert és Vidéke Savings Association, the indemnification worth over 33 billion Forints took less than half of the time than the period required by the relevant law. Those clients who were clearly eligible, i.e. 14,022 of them, received the maximum indemnity amount of 100 thousand euros within a mere 7 work days, instead of the required twenty work days.
The number of indemnified clients rose to 15,090 by July 3, 2012, which means 98.4% of the indemnified depositors. Deposits can be paid depending on the availability of legally binding decisions in the case of the still outstanding cases of e.g. guardianship or inheritance. According to the relevant law, the 20-work-day indemnification deadline will expire on July 17, 2012, which refers to the clearly eligible depositors. Then the depositors will be entitled to enforce their claims towards NDIF for an indefinite period of time in the case of savings deposits, and for as many as 5 years in the case of other deposits, in the context of aftercare.
SCV data supply stands the test
The IT basis of the indemnification process, which was performed faster than ever, was provided by the data portfolio called SCV (single customer view), which was proposed by NDIF in 2009 and which the banks are obliged to declare. The capability of the credit institutions to produce SCV data is regularly controlled by the HSFA. The data, which the clients may request to see at the bank branches, shows the size of indemnity that would have to be paid by NDIF to the depositors at a given moment. The banks have an annual obligation to supply SCV data to the clients. Since this obligation was introduced, it was now that a high-volume payment was effected on the basis of the SCV data portfolio for the first time.
Close cooperation
The fast indemnification of the depositors of the Soltvadkert-based savings association was made possible by the close cooperation between the HSFA and NDIF. As a result of this cooperation, NDIF was able to work with a more accurate than ever data portfolio.
Pay out time is expected to be further shortened
As a result of the yet unapproved deposit insurance directive proposed by the European Commission in 2010, the currently valid twenty-work-day indemnification deadline is expected to be reduced further. The execution of an indemnification process even faster than now will set much stricter requirements towards the deposit insurance organizations and their partners.
“If, by the middle of the decade, the indemnification period is reduced by the EU to ten work days, or rather, to seven days, this will pose an extraordinary challenge to the deposit insurance organizations. The issue of data quality from credit institutions will become critical and the significance of multi-channel indemnification know-how will grow. The performance of high-volume indemnification processes in just a few days is only possible by having a technology with experienced work organization, an immediately usable data portfolio and one that allows a broad-ranging customer service in place. One of the messages conveyed by the current indemnification procedure is that NDIF had these all in place, which will hopefully be confirmed by the satisfaction and confidence of the client.”, – said NDIF’s Managing Director Mr. András Fekete-Győr.
The growing importance of paying agents
NDIF has entered into master agreements for paying agent cooperation with OTP Bank and other credit institutions with their official sites in Hungary and extensive branch networks. The paying agent(s) contribute(s) to the process of indemnification with their payment functions within a shortening indemnification period in the case of high-volume payments. The clients may withdraw the amounts maintained for them on a technical account by the paying agent in cash, they may transfer these amounts to a bank account that they have opened, or they may also place these amounts as deposits or as other savings products at the bank.
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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 (, in the downloadable client information publication entitled “Compass to Deposit Insurance”.
NDIF indemnification
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.
Act CXII of 1996 on Credit Institutions and Financial Enterprises regulating the operations of NDIF, as amended several times

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:

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.