On 31 July 2025, the Hungarian National Bank (MNB) published Recommendation No. 9/2025 (VII.31.) on the transfer of non-performing loan agreements (NPLs). While not legally binding, the Recommendation sets out supervisory expectations and best practices which the MNB will actively monitor as of 1 August 2025.
The Recommendation closely relates to Act XII of 2025, which transposed the EU NPL Directive (2021/2167). Together, the Act and the Recommendation establish a new framework for the sale of loan portfolios, with particular emphasis on governance, transparency, buyer eligibility, and debtor protection.
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📌 Scope of Application
The Recommendation applies to:
credit institutions and non-bank lenders (institutions falling under the Hungarian Banking Act, including third-country branches);
NPL buyers qualifying as credit servicers under Act XII of 2025;
NPL agreements overdue by at least 90 days and the related creditor rights.
It does not cover loans overdue for less than 90 days, or claims not related to loan agreements.
—
⚖️ Key Supervisory Expectations
1. Governance and segregation
NPL portfolios must be segregated from other assets.
Enhanced due diligence is required when selecting buyers.
Mixed portfolio sales (claims within and outside the scope) are discouraged.
2. Internal policies
A documented internal policy must be in place.
Minimum content: guiding principles, detailed workflows, legal/compliance/AML/IT/accounting responsibilities, mandatory content of board submissions, data to be transferred, buyer eligibility criteria, and due diligence obligations.
3. Contractual provisions
Contracts must record the buyer’s statutory obligations (e.g. consumer protection, confidentiality, credit registry reporting).
Buyer and seller reporting obligations.
Application of the EBA/EB NPL disclosure templates.
4. Data security and IT controls
Use of the ERA electronic system with qualified e-signatures is recommended.
Compliance with supervisory IT security and cloud regulations is required.
5. Conflict-of-interest checks
Conflicts between the buyer and debtors/guarantors/collateral providers must be excluded.
If a conflict exists (e.g. ownership ties, political exposure, prior employment), the transaction cannot proceed.
6. Supervisory monitoring
The MNB will actively supervise compliance.
Partial compliance is not acceptable.
—
✅ Practical Steps (within 60–90 days)
Identify and segregate in-scope NPLs.
Update internal policies.
Establish buyer due diligence and eligibility assessment tools.
Revise contract templates.
Strengthen IT systems for ERA-compatible data transfers.
Conduct internal trainings (legal, compliance, AML, IT security).
—
💡 Why is this important?
The new Recommendation frames the implementation of the EU NPL Directive in Hungary and strengthens market transparency and debtor protection. Compliance leads to:
reduced enforcement and supervisory risk,
shorter transaction timelines,
improved market reputation and supervisory confidence.
—
🤝 How We Can Help
At Katona & Partner Attorneys’ Association, we support our clients with:
designing and implementing internal policies,
structuring and documenting loan portfolio transactions,
buyer due diligence and compliance screening,
supervisory liaison and fulfilment of reporting obligations.
📩 Contact us to learn how your institution can prepare for the new supervisory environment.
## Dr. Géza Katona, LL.M. – Attorney at Law (Rechtsanwalt)
Katona & Partner Attorneys’ Association
(Katona & Partner Rechtsanwaltssozietät / Attorneys’ Association)
H-1106 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](mailto:g.katona@katonalaw.com)
🌐 [www.katonalaw.com](http://www.katonalaw.com)The MNB’s New Recommendation on the Transfer of Non-Performing Loans (NPLs) – 2025
On 31 July 2025, the Hungarian National Bank (MNB) published Recommendation No. 9/2025 (VII.31.) on the transfer of non-performing loan agreements (NPLs). While not legally binding, the Recommendation sets out supervisory expectations and best practices which the MNB will actively monitor as of 1 August 2025.
The Recommendation closely relates to Act XII of 2025, which transposed the EU NPL Directive (2021/2167). Together, the Act and the Recommendation establish a new framework for the sale of loan portfolios, with particular emphasis on governance, transparency, buyer eligibility, and debtor protection.
—
📌 Scope of Application
The Recommendation applies to:
credit institutions and non-bank lenders (institutions falling under the Hungarian Banking Act, including third-country branches);
NPL buyers qualifying as credit servicers under Act XII of 2025;
NPL agreements overdue by at least 90 days and the related creditor rights.
It does not cover loans overdue for less than 90 days, or claims not related to loan agreements.
—
⚖️ Key Supervisory Expectations
1. Governance and segregation
NPL portfolios must be segregated from other assets.
Enhanced due diligence is required when selecting buyers.
Mixed portfolio sales (claims within and outside the scope) are discouraged.
2. Internal policies
A documented internal policy must be in place.
Minimum content: guiding principles, detailed workflows, legal/compliance/AML/IT/accounting responsibilities, mandatory content of board submissions, data to be transferred, buyer eligibility criteria, and due diligence obligations.
3. Contractual provisions
Contracts must record the buyer’s statutory obligations (e.g. consumer protection, confidentiality, credit registry reporting).
Buyer and seller reporting obligations.
Application of the EBA/EB NPL disclosure templates.
4. Data security and IT controls
Use of the ERA electronic system with qualified e-signatures is recommended.
Compliance with supervisory IT security and cloud regulations is required.
5. Conflict-of-interest checks
Conflicts between the buyer and debtors/guarantors/collateral providers must be excluded.
If a conflict exists (e.g. ownership ties, political exposure, prior employment), the transaction cannot proceed.
6. Supervisory monitoring
The MNB will actively supervise compliance.
Partial compliance is not acceptable.
—
✅ Practical Steps (within 60–90 days)
Identify and segregate in-scope NPLs.
Update internal policies.
Establish buyer due diligence and eligibility assessment tools.
Revise contract templates.
Strengthen IT systems for ERA-compatible data transfers.
Conduct internal trainings (legal, compliance, AML, IT security).
—
💡 Why is this important?
The new Recommendation frames the implementation of the EU NPL Directive in Hungary and strengthens market transparency and debtor protection. Compliance leads to:
reduced enforcement and supervisory risk,
shorter transaction timelines,
improved market reputation and supervisory confidence.
—
🤝 How We Can Help
At Katona & Partner Attorneys’ Association, we support our clients with:
designing and implementing internal policies,
structuring and documenting loan portfolio transactions,
buyer due diligence and compliance screening,
supervisory liaison and fulfilment of reporting obligations.
📩 Contact us to learn how your institution can prepare for the new supervisory environment.
## Dr. Géza Katona, LL.M. – Attorney at Law (Rechtsanwalt)
Katona & Partner Attorneys’ Association
(Katona & Partner Rechtsanwaltssozietät / Attorneys’ Association)
H-1106 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](mailto:g.katona@katonalaw.com)
🌐 [www.katonalaw.com](http://www.katonalaw.com)