Economy 29 October 2024, 5:35pm

Cash withdrawal may be made free up to HUF 250,000 in Hungary

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The ceiling for free cash withdrawals could increase to HUF 250,000 per month from the current HUF 150,000 in Hungary if Parliament votes in favour of the proposal, opposition MP Bence Tordai wrote on his Facebook page after the proposal passed the Consumer Protection Subcommittee on Tuesday. If the amendment proposal is adopted, it is likely to cost the banking system billions of forints, as there is a transaction tax on cash withdrawals, which they cannot pass on within the limit.

The ceiling of free cash withdrawal will be set to HUF 250,000 if the Economic Committee and the plenary session of Parliament support the proposal adopted unanimously today in the Consumer Protection Subcommittee, wrote Bence Tordai on his Facebook page today.

He wrote that he thought the HUF 150,000 free cash withdrawal threshold, which has remained unchanged for 10 years, has been made obsolete by inflation, which is why Zoltán Vajda's earlier proposal to link this amount to the minimum wage was justified.

"Seeing the surprising openness of the governing parties, Z. Dániel Kárpát, the chairman of the subcommittee, jumped at the opportunity and turned the original motion into a jointly supportable proposal."

If the National Assembly votes in favour of the increase, the banking sector will once again foot the bill. Cash withdrawals are subject to a 0.9% transaction tax, which also applies to cash withdrawals of up to two occasions per month below HUF 150,000, and will presumably be the case for the increased ceiling of HUF 250,000.

It is true that Hungarians withdraw less and less cash and spend more and more with plastic cards, but they still withdrew HUF 2,300 billion in cash in the second quarter of this year, which translates into about HUF 102,000 per transaction (from ATMs).

We don't have statistics on how many of these transactions fell into the category of free cash withdrawals (for which banks cannot charge a fee), but it is clear that

this costs the banks several billions of forints and the bill is about to get bigger now.

Cover image (for illustration purposes only): Getty Images