OTP turns to the Constitutional Court over ATM law

Background: By the end of this year, banks in Hungary must install and operate ATMs in towns with a population of over 1,000, and next year in towns with a population of between 500 and 1,000. Banks must install a total of 1,039 ATMs, which they can exchange with each other and even take over this obligation from each other, but even so, the installation alone will cost them at least HUF 4 billion, not to mention the operation.

What happened now? OTP informs capital market participants that, together with several other credit institutions,

it has filed a constitutional complaint with the Constitutional Court,

requesting that certain provisions of the law on the installation of automatic teller machines and other relevant legislation be found to be in violation of the Constitution.

According to our unconfirmed market information, Raiffeisen and Erste Bank may be considered as the "other credit institutions" mentioned in the text.

The reasoning is as follows: "The obligation to install ATMs imposed by the ATM Act and related legislation, as well as the distribution of automated teller machines, is economically unjustified, disproportionately restricts the applicant credit institutions’ fundamental rights to enterprise and property and

interferes with market operation in a discriminatory manner.

This is not the first time

OTP isn't going to the Constitutional Court for the first time this year: at the end of September, it filed a complaint together with several other market players about the extension of the interest rate cap. OTP argued that the government decree interfered with private legal relationships retrospectively, unnecessarily, and disproportionately, without constitutional justification.

Economy Minister Nagy reacts in a hostile manner

Minister of National Economy Márton Nagy responded to the news of the Constitutional Court complaint on his Facebook profile:

Every Hungarian citizen is entitled to cash withdrawals as a basic service, regardless of where they live in the country,

he writes, adding that ATMs are a basic service that supports and assists the population, just like the basic bank accounts that are already in use today. He emphasizes:

The government continues to insist that ATMs be available everywhere and that the public be able to withdraw HUF 300,000 from them free of charge.

Cover photo (for illustration purposes only): Portfolio