EN ECB -PUBLIC  
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 22 September  2020 
on ensuring a minimum level of cash  services in Hungary  
(CON/ 2020 /21) 
 
Introduction and legal basis  
On 2 September 2020 , the European Central Bank (ECB) received a request from the Magyar Nemzeti 
Bank (MNB) for an opinion on two draft decrees : one amending the MNB decree on the processing and 
distribution of banknotes and on technical tasks relating to the protection of banknotes against 
counterfeiting1 (hereinafter the ‘draft banknote decree’) ; and the other amending the MNB decree on the 
processing and distribution of coins  and on technical tasks relating to the protection of coins against 
counterfeiting2 (hereinafter the ‘ draft c oin decree’ , together referred to as the ‘draft decrees’ ).  
The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 
Functioning of the European Union and the second indent of Article 2( 1) of Council Decision 98/415/EC3, 
as the draft decrees  relate to means of payment . In accordance with the first sentence of Article 17.5 of 
the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.  
 
1. Purpose of the draft decrees  
1.1 As noted in the explanatory memorandum accompanying the draft decrees, the objective of the 
draft decrees is to provide a minimum level of availability in respect of cash services for customers 
of credit institutions and the postal service in Hungary.  Thus, the overall purpose of the draft 
decrees is to ensure that a minimum level of cash services is accessible to the public throughout 
Hungary.  
1.2 According to the Law on the Magyar Nemzeti Bank4, the issuance of forint banknotes and coins is 
within  the sole competence of the MNB.5 The Law on the Magyar Nemzeti Bank provides that forint 
banknotes and coins issued by the MNB are legal tender in  Hungary.6 Hungarian law does not 
require payees to accept cash as payment . Parties to a transaction may freely define the method of 
payment in their relationship,  and they may agree on the use of electronic payments. T he MNB 
does not have the power to limit the contractual freedom of the parties .  
                                                 
1  MNB Decree No . 19/2019 (V.13. ). 
2  MNB D ecree No.  20/2019 (V.13. ). 
3  Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national 
authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42).  
4  Law CXXXIX of 2013 on the Magyar Nemzeti Bank .  
5  Article  4(2) of the Law on the Magyar Nemzeti Bank .  
6  Article  4(2) of the Law on the Magyar Nemzeti Bank .  
ECB -PUBLIC  
2 1.3 The Law on the Magyar Nemzeti Bank authorises t he MNB  to regulate cash distribution,  including 
the denomination exchange of banknotes  and coins  and the exchange of  banknotes and coins 
which have been withdrawn from c irculation, are difficult  to recognise,  or damaged banknotes and 
coins for the equivalent in cash. The MNB  fulfils its mandate by issuing decrees .7 Based on this 
legislative mandate, the MNB intends to amend the MNB D ecrees No. 19/2019  and No. 20/2019 
(V.13 .) regulating the processing and distribution of banknotes and coins respectively and on 
technical tasks relating to the protection of banknotes and coins against counterfeiting (hereinafter 
referred to jointly as the ‘cash decrees’) . 
1.4 The draft decrees apply to credit institutions  with consumer customers  and the postal service .  
1.5 As a new obligation, t he draft decrees require credit institutions with consumer  customer s and the 
postal service to carry out the denomination exchange of forint banknotes and coins and exchange  
forint banknotes and coins  which have been withdrawn from circulation, are difficult to recognise or 
are damaged in all their branches (either permanent or mobile) and post offices.  These services 
must be available to customers irrespective of whether the customer is a consumer or a retail 
customer. Under the cash decrees,  the exchange  of forint banknotes and coins  cover s the 
following services: ( i) the replacement of forint banknotes  and coins withdrawn from circulation with 
other forint banknotes  and coins of the same denomination and that are fit for circulation, or their 
acceptance for payment, including deposits  to the customer’s own bank  account ; and (ii) the 
replacement of forint banknotes  and coins that are difficult to recogni se, or damaged,  with other 
forint banknotes  and coins of the same denomination and t hat are fit for circulation . The draft 
decrees specify  that the acceptance for payment  of banknotes and coins that are difficult to 
recogni se, or damaged,  also qualifies as the exchange of banknotes and coins . The draft decrees 
do not otherwise amend the scope of these services.  
1.6 According to t he draft decrees , credit institution branches and post offices without a counter service 
are released from this  obligation where  the credit institution or the postal service operates : (i) in 
respect of bank notes, at least one permanent branch or post office in the same district of the 
capital city of Budapest or in the same settlement  area;  (ii) in respect of coins , at least one 
permanent branch or post office in the same district of Budapest  or three permanent branches or 
post offices in the same county , which carry out the denomination exchange of forint banknotes 
and coins and exchang es of forint banknotes  and coins  which have been withdrawn from 
circulation, are difficult to recognise or a re damaged.   
1.7 The draft banknote decree maintains  an existing provision according to which a credit institution or 
the postal service operat ing an automated teller  machine must accept deposits through the 
machine in the context of its obligation to exchange banknotes  withdrawn from circulation.  
1.8 The draft decrees  allow credit institutions  and the postal service to make the exchange  of forint 
banknotes and coins subject to prior notification , so they can  ensure that cash is available to 
perform the exchange. In such a case,  the branch or post office must perform the exchange within 
two days of receipt of the customer’s request.  
                                                 
7  Article  23(11) and Article 171(2)b) of the Law on the Magyar Nemzeti Bank . 
ECB -PUBLIC  
3 1.9 The draft coin decree requires credit institution branches and post offices w ith a counter service to 
exchange forint coins without quantitative restrictions, while those without a counter  service  can 
exchange a maximum of 100 forint coins on a single occasion.  
1.10 According to the explanatory memorandum accompanying the draft decrees, the reason for 
amending the cash decrees  is that some credit institutions with a nationwide branch network and 
with a significant  portfolio of  consumer client s have reduced cash services  in their branches and 
started to provide them through autom atic teller machines and cash- in or cash- recycling machines , 
i.e. without the need for interaction with bank staff . However, as noted by the MNB, not all cash 
services can be managed through such  machines. By way of example, the handling of damaged 
banknotes and coins and denomination exchange cannot be carried out in this way.  
 
2. General observations  
2.1 The ECB understands that  electronic payment instruments are increasingly used as a method of  
payment in Hungary . The MNB expects that the role of electronic payments will continue to grow , 
since  from 1 January 2021 service providers subject to the use of the online cash register  must 
give their customers  the possibility of making electronic payments.8 Still, the us e of cash i n 
payment transactions  is dominant  in Hungary , and cash payments account for 80% of total 
payment transactions in the retail sector .9  
2.2 Although the ECB holds a positive view of further innovation and development in the field of 
electronic payment instruments, the ECB also considers that ensuring an adequate level of access 
to legal tender ( cash ) is essential . As previously noted,  it is important that all Member States, 
including non- euro area Member States, take appropriate measures to ensure that credit 
institutions  and branches operating within their territories provide adequate access to cash services  
in order to facilitate the continued use of cash.10 
2.3 Cash has a unique role because certain groups in society  are unable to use electronic payment 
methods and other innovative payment solutions. As such, cash is a  crucial payment method for 
the elderly, immigrants, the disabled, socially vulnerable citizens  and anyone with limited access to 
digital services.  There are other l egitimate reasons why payers might  prefer to use cash. It is the 
only means of payment that can be used to settle debt immediately and finally without an 
intermediar y, and which is available to those who have no access to bank services. Additionally, 
cash facilitates  the inclusion of the entire population in the economy by allowing financial 
transactions to be settled in this way. Furthermore , cash could play an import ant role in the event of 
a disturbance in the payment system.11  
2.4 Against this background, the ECB considers that the need for a minimum level of access to cash 
services , the scope of which is defined primarily on a geographical basis,  is well justified. The ECB 
therefore welcomes the initiative of the MNB to exercise its right to regulate cash payments with the 
                                                 
8  See the Payment Systems Report  2020, Magyar Nemzeti Bank, p. 11.  
9  See the Payment Systems Report  2020, Magyar Nemzeti Bank  p. 7. 
10  See paragraph 2.3 of Opinion CON/2019/41 and paragraph 9.2.3 of Opinion CON/2020/13.  
11  See paragraph 2.1 of Opinion CON/2019/41 and 9.2.1 of Opinion CON/2020/13.  
ECB -PUBLIC  
4 objective of ensur ing that there is a minimum level of availability of cash for customers  of credit 
institutions and the postal service throughout Hungary.  
 
This opinion will be published on EUR -Lex. 
 
 
Done at Frankfurt am Main, 22 September  2020.  
 
[signed]  
 
The President of the ECB  
Christine LAGARDE