August 6, 2014
The National Deposit Insurance Fund (NDIF) delivered the covered depositors’ money to the paying agents within a single week, which is considerably faster than the twenty working days required by the relevant EU legislation. Individual settlement letters were posted to 97 percent of the depositors of Orgovány és Vidéke Takarékszövetkezet „f.a.” (in English: Orgovány and Vicinity Savings Cooperative Bank “under liquidation”) within 7 working days; concurrently, NDIF transferred the financial coverage for the indemnification to its paying agent partners in due time. As a result, 65 percent of the depositors have received their money at the post offices participating in the indemnification. Over 9,500 depositors are receiving their savings from paying agents at savings cooperatives designated in their respective settlement letters in these days, according to a schedule. Payouts to 978 depositors are awaiting clarification for reasons beyond NDIF.
By the end of the 7th working day following the start of the indemnification process, NDIF has posted settlements of indemnification to 29,200 depositors of Orgovány és Vidéke Savings Cooperative, and has transferred coverage for payouts to the Hungarian Postal Company and to the 33 savings cooperatives participating in the payout process. The majority of all those involved, namely 29,266 customers, have received their compensations, which equals EUR 100,000 (HUF 30,835,000) per depositor as a maximum.
Since Thursday last week, the Hungarian Postal Company has delivered payouts to approximately 20,000 private individuals who held savings up to HUF 2.5 million. Another 9,584 customers of the savings cooperative were informed in individual settlement letters, the delivery of which started on Monday, this week, about the scheduled procedure and the paying agent in another savings cooperative where their respective further instructions regarding their deposits were to be provided. With that, NDIF has delivered the funds for the indemnification of the covered depositors to the paying agents within a week, which is considerably faster than the prescribed twenty working days.
“This faster-than-before indemnification was owing to the data cleaning and the arrangements made in the preparatory period. The recent cases of indemnification justified the necessity of deposit data to be supplied by credit institutions, which was prescribed by NDIF in 2009. It will have an even more emphatic role in the future, as the time limit available for delivering the indemnification data and dispatching the financial coverage will be reduced to 7 working days by 2024, in harmony with the EU deposit insurance directive”, said András Fekete-Győr, Managing Director of NDIF.
In case of 3 percent of the depositors eligible for indemnification (978 customers), legal proceedings are needed to the effect that NDIF can carry out the indemnification (in 245 cases, a public notary’s ruling regarding the distribution of the probate estate of deceased depositors, in 514 cases, a decision by the guardianship authority, and in case of Start Accounts, opening of a Start Account with the Hungarian State Treasury). The deposits of 171 customers were blocked by the savings cooperative, and the depositors need to proceed at Orgovány és Vidéke Savings Cooperative to have the block released. In addition, 48 customers with incomplete data on their deposits are registered with NDIF, awaiting justification to be issued by the Savings Cooperative.
State-guaranteed deposits started with Orgovány és Vidéke Savings Cooperative before 1993 will be processed and paid out in the near future, under a mandate issued by the Ministry of National Economy to NDIF. These deposits will bear interest up to the payout date.
On July 4, 2014, the Central Bank of Hungary (MNB) withdrew the operating license of the savings cooperative headquartered in Orgovány, and decided to send supervisory commissioners, who proposed MNB the liquidation of the savings cooperative after having assessed its situation. The liquidation was ordered by the competent court at MNB’s initiative, and was published in the official Company Gazette on 25 July.
Information regarding indemnification by NDIF remains available at NDIF’s customer service 24 hours a day, 7 days a week at local tariffs at 06-40-918-918, for the whole duration of the indemnification process.
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To the attention of the editor
Bank deposits held in credit institutions incorporated in the territory of the European Union are insured by national deposit insurance institutions established in their respective countries of foundation. Since 1993, all credit institutions licensed in Hungary (banks, savings cooperatives, credit cooperatives, home savings banks or funds) have been required to join NDIF, and to pay an accession fee and an annual premium. The main duty of NDIF, which works for the stability of the domestic banking sector, is to indemnify the owners of deposits from its accumulated assets in the event deposits are frozen. For the effective rules of deposit insurance, see our downloadable customer information publication called “Compass” accessible on our home page:
The indemnification process
In the event a credit institution is liquidated / dissolved, NDIF disburses compensation aggregated by person and by credit institution to the depositors eligible for indemnification within 20 working days, up to a limit of EUR 100,000. Indemnification, which is paid in HUF in all cases, applies to the principal and interest amounts alike. For information on the indemnification process, please see NDIF’s home page: http://www.oba.hu/en/deposit-insurance/payout-process
Act CCXXXVII of 2013 on Credit Institutions and Financial Enterprises, which includes the rules governing the operation of NDIF.
NDIF’s consumer protection logo
The banking products insured by NDIF are easy to recognize by the consumer protection logo, which are to be displayed since March 1, 2012. Use of the logo is checked by NDIF on its audits of credit institutions, and is monitored by the National Bank of Hungary:
NDIF’s member institutions
As of December 31, 2013, NDIF had 157 member institutions, including 4 home savings banks, 4 credit cooperatives, 34 banks and 115 savings cooperatives.