MNB: the establishment of Revolut’s subsidiary bank in Hungary would be reassuring

By: Trademagazin Date: 2024. 10. 21. 11:08

By the end of the summer, Revolut had 1.5 million domestic customers, and the launch of the Hungarian branch of the Lithuanian parent bank is being postponed. However, even as a branch, Revolut would not be a member of the deposit protection system of the National Deposit Insurance Fund (OBA). The reassuring solution would be for the company to operate as a subsidiary bank in Hungary with headquarters, sufficient capital, and the OBA’s deposit guarantee – the Magyar Nemzeti Bank (MNB) told MTI on Thursday.

They went on to say that the central bank cannot check Revolut’s customer numbers, payment transactions, and key data from the point of view of domestic financial stability and customer protection.

The cross-border service providers are obliged to provide information about these data to the supervisory authority (DII) of their headquarters (in this case, Lithuania), while – due to its size – the business reliability of Revolut will be supervised by the European Central Bank (ECB) from January 1, 2024.

Revolut Bank UAB is also a member of the Lithuanian deposit insurance system – which is an order of magnitude smaller than OBA.

In the case of Hungarian consumer protection complaints against Revolut, the MNB can currently only initiate action by the Lithuanian supervisory authority or the European Banking Authority (EBA).

After the possible transformation into a branch, the Hungarian central bank could examine the short-term solvency (liquidity) of the branch in the same way as domestic banks, and whether it complies with the provisions of consumer protection and the prevention of money laundering and terrorist financing.