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Banknote and Coin Decrees

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The Banknote Decree and the Coin Decree stipulate the rules pertaining to the cash distribution, cash processing and recycling activities, as well as the management of the operational risks related to cash distribution, and alsoincludes regulations with regard to the handling of suspected counterfeit banknotes and coins. The Banknote Decree and the Coin Decree were promulgated on 6 September 2011 and – with the exception of certain provisions entering into force gradually – they entered into force on 1 November 2011. Till now, the Banknote Decree has been modified twice, while the Coin Decree has been amended on one occasion. In the case of both decrees, the latest amendment – with the exception of the rules pertaining to the exchange of forint banknotes and coins that are damaged or withdrawn from circulation – entered into force on 1 October 2014. The exchange rules are effective from 24 November 2014.

Banknote DecreeCoin Decree
MNB Decree 11/2011 (IX. 6.)
(original decree)
MNB Decree
12/2011 (IX. 6.)  (original decree)
MNB Decree 2/2014 (II. 14.)
(first amendment)
MNB Decree
35/2014 (IX. 25.)  (first amendment)
MNB Decree 34/2014 (IX. 25.)
(second amendment)


Main rules of cash distribution, processing and recycling

In order to ensure the proper quality of the recycled banknotes and coins, and to preserve the confidence in the Hungarian legal tender, the MNB has determined the basic conditions of cash recycling, and the criteria pertaining to the examination of the banknotes and coins in terms of authenticity and fitness for circulation.The entities coming under the ruling of the Banknote Decree and the Coin Decree (credit institutions, post office, cash processing organisations, currency exchange offices, other economic agents operating machines suitable for cash deposit and withdrawal) may only recycle the banknotes and coins, if they examined them in terms of authenticity and fitness for circulation and found them authentic and fit for circulation. The examination in terms of authenticity and fitness for circulation may be performed by machine or manually. In the case of banknotes, manual examination may only be applied to a limited extent.

Based on the second amendment of the Banknote Decree, as of 1 October 2014 the cash processing organisations may perform the examination of the banknotes in terms of authenticity and fitness for circulation only by banknote handling machines that have successfully passed the quality control test of MNB.

Forint banknotes may only be put in circulation via automated teller machines (ATM), if the banknote has been examined in terms of authenticity and fitness for circulation by a banknote handling machine that passed the quality control test of MNB.

The MNB checks the suitability of thebanknote handling machinesfor examining the forint banknotes' authenticity and fitness for circulation within the framework of a separate procedure (so-called quality control test). The MNB registers the data of the machines that passed the quality control test in a so-called MNB register and publishes it on its home page. (See the description of the quality control test process for the banknote handling machines and the MNB register here >>)

The operators must report the deployment of the banknote handling machines to MNB in advance. The companies that manufacture and distribute banknote handling machines must provide the MNB with quarterly data supply on the machines deployed. (See the detailed information with regard to the reporting of the deployment and the fulfilment of the quarterly data supply here >>)

The credit institution and post office branches handling an average daily payment turnover exceeding HUF 40 million must, between 2013 and 2016, gradually introduce a procedure that ensures that they receive supplies the authenticity and fitness for circulation of which have been examined by a machine listed in the MNB register.

The credit institution and post office cash counters handling an average daily cash turnover in excess of HUF 5 million must be supplied with UV-A/C equipment to examine the forint banknotes' authenticity and fitness for circulation gradually, between 2013 and 2016.

As regards the foreign banknotes and coins, the sorting requirements applicable to the fitness for circulation, prescribed by the issuing country, must be followed. In the case of foreign banknotes and coins unfit for recycling, the foreign institution that issued the given currency should be contacted for further information.

All of the cash handling machine types included in the list of tested and approved machines published by the ECB meet the criteria of mechanical processing of euro banknotes. The framework of conditions regarding the recycling of euro banknotes is available at:

http://www.ecb.europa.eu/euro/cashprof/cashhand/recycling/html/index.en.html

List issued by ECB: http://www.ecb.europa.eu/euro/cashprof/cashhand/recycling/html/tested.en.html

All of the cash handling machine types included in the list of tested and approved machines published by the Commission meet the criteria of mechanical processing of euro coins. The list is available on the page of the Commission's European Anti-Fraud Office (link to the page: http://ec.europa.eu/anti_fraud/euro-protection/euro-coins/index_en.htm)

Handling of the operational risks of cash distribution

The credit institutions (save the specialised credit institutions and the credit unions) and the post office must regularly assess the operational risks jeopardising their cash distribution, specify their branches that are critical in terms of cash distribution and develop a business contingency plan for the management of extraordinary situations. Based on the first amendment of the Banknote Decree, as of 2014 the action plan must contain the operational risks identified in respect of the operation of the branches' ATMs, as well as the rules for the continued operation of the branch's ATMs in emergency situations, with special regard to the refilling of the branch ATMs with cash.

Denomination exchange, banknotes and coins withdrawn from circulations, exchange of hard to recognise and damaged banknotes and coins

Denomination exchange: exchange of forint banknotes and coins to other denomination of forint banknotes and coins.

Exchange of forint banknotes and coins:

  • exchange of forint banknotes and coins withdrawn from circulation to forint banknotes and coins of the same denomination by the credit institutions and the post office within the deadline stipulated in Article 23 (3) of the Central Bank Act;
  • exchange of hard to recognise and damaged forint banknotes and coins by the credit institutions and the post office to forint banknotes and coins, fit for circulation, of the same denomination.

The credit institutions with branches operating a cash counter and the post office are obliged to perform denomination exchange, and exchange of banknotes and coins.Within the exchange of denominations, and the exchange of hard to recognise and damaged banknotes and coins they are obliged to exchange not more than 50 pieces of banknotes and coins in circulation on each occasion.

The credit institutions and post offices are entitled to perform the denomination exchange and the exchange of hard to recognise and damaged banknotes and coins subject to certain limitations and conditions. The clients must be informed of the conditions and fees applicable to the denomination exchange and the exchange of banknotes/coins in the form of an announcement displayed in the branches and on the home page in a clearly visible and easily accessible manner.

Pursuant to Article 23 (3) of the Central Bank Act, the credit institutions and the post offices are obliged to exchange – free of charge – the banknotes withdrawn from circulation to legal tender for 3 years and the coins for 1 year from the withdrawal date. All branches that have a cash counter must perform the exchange. The exchange must not be made conditional upon the existence of an account or the use of additional services. The clients must be informed about the possibility of the exchange through announcements displayed in the branches and the on the home page in a clearly visible and easily accessible manner.

Handling of suspected counterfeit banknotes and coins

In order to prevent and reduce the counterfeiting of cash the MNB performs the expert examination of the Hungarian and foreign legal tenders. In the interest of providing protection against counterfeiting

  • natural persons and legal entities as well as other entities without legal personality are obligedto hand over the suspected counterfeit banknotes and coins to a credit institution, post office or the MNB for the purpose of expert examination;
  • other economic agents operating ATMs or banknote handling machines operated by clients are obliged to handover the suspected counterfeit banknotes found by them to their contracted cash processing organisation or – in the absence thereof – to a credit institution or the MNB for the purpose of expert examination;
  • the credit institutions and post offices are obliged to take over the suspected counterfeit banknotes and coins from private clients and record it in minutes, check the authenticity of these coins and forward them to the MNB within 20 working days, together with the minutes about the takeover;
  • the cash processing organisations and cash distributors are obliged to hand over or send to the MNB the suspected counterfeit banknotes and coins found during the authenticity and fitness for circulation examination, which they as well classified as suspected counterfeit based on the authenticity check performed by them, together with the minutes of takeover within 20 working days following the date of finding or the deposit to the machine managed by the client.

Simultaneously with a notification about the result, the MNB returns the countervalue of the forint banknote and coin identified as genuine by the central bank’s expert examination or the genuine foreign banknote and coin to the initiator of the expert examination or his proxy.