Following a comprehensive investigation, the Magyar Nemzeti Bank (MNB) imposed a HUF 89 million supervisory fine against the OTP bank group due to deficiencies in, among other things, IT security, credit risk, capital adequacy, corporate governance, supervisory data provision and deposit insurance. The detected errors do not pose a systemic risk and the supervisory measures do not affect the reliable operation of the banking group, the central bank told MTI.
Fraud prevention gaps
According to the information, the MNB is responsible for 6 members of the OTP group – OTP Bank Nyrt. (OTP Bank), Merkantil Váltó és Vagyonbefekteť Bank Zrt. (Merkantil Bank), OTP Lakástakarekpénztár Zrt. (OTP Ltp.), OTP Jelzálogbank Zrt. (OTP JZB .), OTP Faktoring Követeléskezelő Zrt. (OTP Faktoring) and OTP Ingatlanlızing Zrt. (OTP Ingatlanlızing) – the audit reviewed the operation of the bank group from March 31, 2019.
During the group’s investigation, the MNB identified occasional deficiencies in relation to the delayed notification of outsourced activities and the lack of regular reviews by the internal audit, as well as fraud prevention activities.
In relation to lending risks, the central bank found that the regulation of customer group formation and the application of the definition of a non-performing customer were not appropriate. The investigation revealed a shortcoming in the capital requirement calculation, and some supervisory data services were completed incorrectly or incompletely.
The MNB also identified deficiencies in the disaster prevention tests of critical systems and data centers as a problem in IT and information security operations.
Penalties
As a result of all this, in its decisions published on Friday, the central bank imposed 55 million on OTP Bank, 18 million on Merkantil Bank, 6 million on OTP Ltp., 3 million on OTP JZB., 5 million on OTP Faktoring, and 2 million on OTP Ingatlanlizing. imposed a supervisory fine of HUF and obliged the institutions to correct the identified deficiencies and to report on the measures taken.
