On 31 July 2025, the National Bank of Hungary (NBH/MNB) published Recommendation 9/2025 (VII.31.) on the transfer of non-performing loan (NPL) agreements. Although not a binding regulation, the Recommendation outlines the NBH’s supervisory expectations and good practices, which it will actively monitor from 1 August 2025.
This development is closely tied to Hungary’s Act XII of 2025, which transposed the EU NPL Directive (2021/2167). Together, these measures reshape the regulatory landscape for loan portfolio disposals, with an emphasis on governance, transparency, purchaser suitability, and debtor protection.
Scope of Application
The Recommendation applies to:
- Credit institutions and non-bank lenders (Hpt.-regulated entities, including Hungarian branches of third-country institutions);
- NPL purchasers that qualify as credit servicers under Act XII of 2025;
- NPL agreements that are at least 90 days past due, along with related creditor rights falling under the Act’s transfer regime.
It does not extend to loans that are not overdue, are less than 90 days past due, or claims unrelated to a credit agreement.
Core Supervisory Expectations
1. Governance and segregation
Institutions should segregate NPL portfolios falling under the new Act from other assets, and apply enhanced diligence in transfers—particularly when selecting a purchaser. Mixed-package sales combining in-scope and out-of-scope claims are discouraged.
2. Internal policy framework
Institutions are expected to maintain a documented internal policy governing NPL transfers. At a minimum, this should set out:
- guiding principles for transfers;
- detailed workflows and roles across legal, compliance, AML, risk, IT, and accounting;
- required content of board submissions (e.g. options analysis, impact on provisioning);
- obligations to provide purchasers with sufficient data on value, collateral, and recovery;
- purchaser eligibility and selection criteria, including exclusion grounds and conflict checks;
- due diligence obligations, such as verifying funding sources.
3. Contractual clauses
Sale agreements should capture:
- statutory obligations of the purchaser (consumer protection, secrecy, debtor communications, KHR/credit register reporting);
- the purchaser’s reporting duties towards the NBH;
- the seller’s ongoing reporting obligations, where applicable;
- application of EBA/Commission NPL disclosure templates.
4. Data security and IT controls
The NBH highlights the use of the ERA electronic system with qualified electronic signatures as good practice for data transfers. Information security and cloud-related controls should meet prior supervisory expectations.
5. Conflict-of-interest checks
Before selecting a purchaser, institutions must verify that there are no conflict-creating relationships between debtors, guarantors, collateral providers, and the purchaser (e.g. ownership ties, political exposure, past employment). Transactions should not proceed if conflicts are identified.
6. Supervisory oversight
The NBH will monitor adoption through its supervisory toolkit. While firms may integrate the Recommendation into their policies, the NBH cautions against citing partial compliance.
Practical Action Points
Within the next 60–90 days, market participants should:
- Identify and segregate in-scope NPLs;
- Update internal NPL transfer policies in line with NBH expectations;
- Develop purchaser screening and due diligence tools, including source-of-funds checks;
- Update template agreements to reflect mandatory purchaser obligations and reporting duties;
- Strengthen IT systems to ensure ERA-compatible, secure data transfer;
- Train internal teams (legal, compliance, AML, workout/recovery, IT security) on the new process.
Why It Matters
The Recommendation consolidates Hungary’s implementation of the EU NPL Directive, shaping supervisory expectations around data integrity, transparency, and purchaser suitability in secondary loan markets.
For credit institutions and non-bank lenders, aligning with these standards is not only a matter of compliance, but also of risk management. Institutions that adjust early will benefit from:
- reduced execution and regulatory risk;
- shorter transaction timelines in NPL disposals;
- stronger market reputation and supervisory credibility.
How We Can Help
At Katona & Partners Law Firm, we support banks, non-bank lenders, and NPL investors with:
- internal policy design and implementation;
- structuring and documenting loan portfolio transactions;
- purchaser due diligence and compliance screening;
- supervisory engagement and reporting obligations.
📩 Please contact us to discuss how your institution can best prepare for this new supervisory landscape.
Katona & Partners Law Firm
(Katona & Partner Rechtsanwaltssozietät / Attorneys’ Association)
H-106 Budapest, Tündérfürt utca 4.
Tel.: +36 1 225 25 30
Mobile: +36 70 344 0388
Fax: +36 1 700 27 57
g.katona@katonalaw.com
www.katonalaw.com