NATIONAL DEPOSIT INSURANCE FUND (OBA)
What is OBA?
OBA is the abbreviation for the National Deposit Insurance Fund. The organisation was established to ensure that the money of depositors placed in Hungarian credit institutions is safe. If any of the credit institutions was unable to fulfill its obligations towards depositors, the National Deposit Insurance Fund has to fill the gap.
What is deposit protection?
According to the law, if the insured deposit cannot be withdrawn due to the insolvency of the given credit institution (in other words, the deposit is “frozen”), the Fund will pay indemnification for the depositor.
Specifically, it means that, from 1 January 2011, the Fund will pay indemnification up to EUR 100,000 on the principal and interest of the frozen deposits of individuals and credit institutions. The indemnification is paid in HUF (the HUF amount is calculated based on the official FX rate published by the MNB).
How does it work?
If the bank deposit cannot be withdrawn due to the insolvency of the credit institution, OBA will pay the indemnification for the client within 20 working days. The indemnification is a HUF amount equalling a maximum of EUR 100,000 in aggregate per depositor and credit institution.
The essence of the operation of Hungarian deposit insurance can be summed up in the following three points:
- In the event of the insolvency of credit institutions, OBA will pay indemnification for registered deposits (a deposit is registered when it can be clearly identified based on the ID data included in the contract), for both private individuals and legal entities.
- This payment can be a HUF amount equalling maximum EUR 100,000 in aggregate per depositor and credit institution.
- The insurance is valid for each credit institution separately. So if a depositor places their money at several credit institutions, it will be insured up to EUR 100,000 everywhere.
Which deposits are insured?
The insurance provided by OBA covers all registered deposits, regardless of their number and currency, which were deposited at a credit institution that is a member of OBA, with the exceptions listed in Act CXII of 1996 on credit institutions and financial enterprises (Hpt.), including the cases specified in Sections 213 and 239 (4).
Deposit insurance covers, among others:
- HUF deposits,
- FX deposits (excluding deposits not placed in EUR or the legal currency of a member state of the Organization for Economic Cooperation and Development),
- amounts in current accounts (demand deposits).
What should clients do if there is an insurance event?
Clients do not have to do anything; OBA will notify the affected clients of the indemnification based on the available data and it will send them the indemnification.
How is it carried out?
Indemnification will start after the deposits are frozen or based on the resolution of the Supervisory Authority, or the publication of the judicial order on liquidation, whichever is the earliest of the three dates). OBA has to finish the payment of the indemnification within 20 working days. In exceptionally justified cases, the law allows the payment deadline to be extended by a maximum 10 working days, on no more than one occasion, by permission of the Supervisory Authority.
OBA will start to examine the data after the backup saving of the data made available by the credit institutions. It will start the payments after processing the data. Payments can be made by transfer to an account held at another credit institution, by cash payment through the post office or by direct payments.
The OBA administration will give customised responses to individual client complaints.
Is my deposit insured at UniCredit Bank?
UniCredit Bank Hungary Zrt. (or its legal predecessors) has been a member of the National Deposit Insurance Fund since its establishment, thus the OBA insurance covers the deposits placed at the bank.
The above information is not exhaustive. For detailed information on the Fund and the insurance provided for depositors please check http://www.oba.hu/en and the attached publication.