Hungary’s Central Bank Fines OTP and MBH Banks Over AML/CTF Compliance Failures

Magyar Nemzeti Bank (MNB), Hungary’s central bank, has imposed penalties totaling HUF 43 million ($106,183) on OTP Bank and MBH Bank for failing to meet anti-money laundering (AML) and counter-terrorist financing (CTF) compliance requirements.

OTP Bank, Hungary’s largest commercial lender and a significant player in central and eastern Europe, was fined HUF 28 million (€67,535). MBH Bank, the nation’s second-largest commercial bank, received a penalty of HUF 15 million (€36,180).

In supervisory decisions issued between late 2023 and early 2024, both institutions were instructed to address specific deficiencies by August 2024. However, a recent review found unresolved issues, prompting the fines.

“The MNB required the credit institutions to take a number of measures by August 2024 due to shortcomings in the field of money laundering and terrorist financing prevention,” the central bank said. “Today, the MNB determined that MBH Bank and OTP Bank had not fully complied with the supervisory decisions.”

OTP Bank’s penalty stems from incomplete retrospective screenings, insufficient customer due diligence processes, and weaknesses in internal controls and audit mechanisms.

MBH Bank’s fine was related to failures in updating internal regulations, inadequate staffing levels for transaction monitoring, and deficiencies in implementing effective rules for verifying the source of funds.

While the MNB acknowledged that the identified deficiencies do not pose immediate risks to the safe operation of either bank, it stressed the urgency of compliance. “Both institutions must act swiftly to ensure full compliance with AML/CTF requirements,” the central bank said.

The penalties serve as a reminder of the regulatory scrutiny faced by financial institutions in Hungary as they work to align with stringent AML/CTF standards.

By fLEXI tEAM