According to information received to date, Revolut Bank will launch its operations in Hungary as a cross-border institution supervised by the Bank of Lithuania, rather than as an independent subsidiary bank. Accordingly, Hungarian customers may settle their deposit insurance, consumer or settlement disputes in Lithuania rather than in Hungary (presumably in the Lithuanian or English language, rather than in Hungarian). Considering the interests of Hungarian customers, the MNB urges Revolut to pursue its activity as a domestic subsidiary bank.

According to current plans, Revolut Bank, launching its operations in Hungary as well, initially will operate as a cross-border institution (and later, according to the plans, as a branch office), i.e. not as a subsidiary bank holding a Hungarian banking licence. However, in this way the prudential and consumer protection supervision of the cross-border bank will be the competence of the Bank of Lithuania rather than of the Magyar Nemzeti Bank.

As a result, the Magyar Nemzeti Bank, in it is capacity as “host country” supervisory authority, will have only limited consumer protection competence: in matters breaching consumers’ interest and the public good it may initiate actions primarily at the home country’s (Lithuanian) supervisory authority. However, the MNB will continue to take firm actions within this legislative framework in the future as well, and at the same time it will also inform the public of any risk that may occur – e.g. a fee structure that is unusual and less transparent for domestic customers – or a suspected infringement.

According to its announcement with regard to launching its operations in Hungary, Revolut Bank – as a new element in addition to the payment services – will also pursue lending and collect deposits. However, as it is a cross-border institution, the funds of the Hungarian depositors – just like of the 16 million other Revolut depositors – will be secured by the Lithuanian deposit insurance scheme (also guaranteeing the payment of maximum EUR 100,000 per deposit and depositor) rather than by the Hungarian scheme.

Accordingly, should a Hungarian customer incur any settlement, consumer or deposit insurance problem, he may essentially seek legal remedy in connection with the dispute only in Lithuania (subject to international arbitration procedure), presumably in Lithuanian or English.

According to its publicly available financial statements, Revolut Ltd. realised a loss of GBP 122 million and GBP 98 million on equity of GBP 417 million and GBP 96 million last year and in 2019, respectively.

The MNB supports, at all times, the strengthening of competition in the Hungarian financial markets, as it encourages market participants to implement innovations, developments and to operate more efficiently, at the same time providing their customers with higher quality, simpler and faster services.

On the other hand – when there is a particularly wide customer base in Hungary – these favourable trends must not conflict with the interests of Hungarian customers, which take priority by all means. Accordingly, the MNB, in its capacity as financial supervisory authority, would prefer Revolut Bank to pursue its activity in Hungary as a well capitalised subsidiary bank with registered office in Hungary, supervised by the Hungarian central bank.

Magyar Nemzeti Bank