The Government will submit to parliament a bill which translates the Kuria’s resolution for the uniformity of the law into the legal system, Minister for National Economy Mihály Varga announced at a press conference, adding that the Government aims to legally settle the issue of forex borrowers in two steps.

In the Government’s view, banks will have to repay the amount they have unlawfully charged from “misled customers”, Mr Varga said. This settlement will cover foreign currency denominated loan and leasing contracts – including financial ones -- as well as loan, leasing and financial leasing contracts with potential one-sided contract modifications.

The calculation of actual losses incurred by forex borrowers will be completed in the second phase, concerning which the Ministry for National Economy will table a proposal in September after negotiating with the Hungarian Banking Association and in some issues with the National Bank of Hungary (MNB).

In the opinion of the Government, the issue of exchange rate bid/ask spread can be settled relatively quickly, as the Kuria has ruled that banks should have applied the MNB’s official exchange rate, he stressed.

The Cabinet will make a proposal for the clear definition of the term of limitation, of which the Minister has already informed the leaders of the Banking Association. According to the stance of the Government, as long as a contract is valid, the contractual relationship is also valid and the limitation period may only commence after the termination of the contract.

Speaking about unfair treatment of contracts, the Minister said that the window of opportunity for both customers and financial institutions must be left open for seeking a court verdict to determine whether or not their contract is lawful. The Minister pointed out that the Kuria has formulated seven principles which may determine the fairness of a contract. “I suppose there are very few forex loan contracts which fulfil all the seven requirements,” Mr Varga stated.

The Minister emphasised that the Government will also recommend deadlines for related court proceedings, which may be as early as the end of October.

(Ministry of National Economy)