Hungary moves to tighten oversight of the National Bank of Hungary

On 6 October 2026, the Hungarian government submitted Bill No. T/796 (the Bill) to amend Act CXXXIX of 2013 on the National Bank of Hungary (MNB Act), which – when passed – will strengthen the supervisory board’s ownership control of the National Bank of Hungary (MNB), establish a new internal audit organisation under the direction of the MNB’s supervisory board and extend the supervisory board’s oversight to companies majority-owned by the MNB and foundations established by it. 

The Bill also amends the rules on electing the supervisory board’s members and chair, changes their terms of office and reduces their remuneration by half. At the same time, the Bill preserves existing oversight of the MNB’s statutory central-bank and financial-supervisory functions.

Background and purpose 

Under the MNB Act, the supervisory board is the body responsible for the continuous ownership control of the MNB. According to its preamble, the Bill strengthens this ownership control and supports it with a new internal audit organisation to be established within the MNB. It also ensures the supervisory board’s control applies to companies majority-owned by the MNB and foundations established by the MNB, and amends the rules on electing the supervisory board and its chair.

The MNB is owned by the Hungarian state but acts independently when carrying out its statutory tasks. 

The proposal addresses internal governance and ownership oversight of MNB-related entities, rather than creating new powers over institutions supervised by the MNB.

Oversight of MNB subsidiaries and foundations

The Bill would expand and clarify the supervisory board’s statutory oversight mandate. The supervisory board remains the body of continuous ownership control of the MNB, but under the proposed legislation its competence extends – with the involvement of the MNB’s executive board – to companies that are majority-owned by the MNB and foundations established by the MNB.

The extension, however, is subject to an important limitation. The supervisory board’s control would continue to exclude the MNB activities already protected under the MNB Act, including monetary policy, the issuance of currency, reserve management, resolution and financial-sector supervision, and the impact of those activities on the MNB’s financial results. 

This limitation would also apply to oversight involving MNB-majority-owned companies and MNB-established foundations.

Separate internal audit organisation under the supervisory board

The central structural change is that the Bill replaces the existing internal audit structure, whose work is currently divided between the executive board and the supervisory board, with two organisationally separate units, each under one body’s direction. An internal audit unit would be under the direction of the executive board, which would continue to discuss that unit’s findings and audit plan. A new internal audit organisation (New Organisation) would operate under the direction of the supervisory board for tasks falling within the supervisory board’s competence. Within the MNB’s organisational structure, this New Organisation would have the same status as units directly managed by the deputy governors.

The supervisory board would approve the New Organisation’s annual audit plan, discuss its reports at least every six months and monitor the implementation of necessary measures. It could engage external experts, decide on justified staffing changes and make recommendations based on audit findings. The supervisory board would also define the New Organisation’s tasks and the professional requirements applicable to its head and experts.

The Bill also sets out the New Organisation’s staffing and operational arrangements. The chair of the supervisory board would exercise employer rights over the head and experts of the New Organisation, with the MNB required to provide the resources needed for the exercise of those rights, following prior consultation and in accordance with the supervisory board’s decision. The MNB Governor would set the New Organisation’s IT and other technical conditions and audit procedures in internal rules, including cooperation requirements for audited units and staff. The MNB Governor must regularly review those rules and consult the chair of the supervisory board on their content.

Regular and extraordinary audits

Under the Bill, the supervisory board would perform its control function through both regular and extraordinary audits, involving an MNB executive-board division designated by the MNB Governor.

As part of its regular control, the supervisory board would, at least quarterly, receive reports from the heads of companies majority-owned by the MNB and the chairs of the boards of trustees of foundations established by the MNB. They would appear together with a deputy governor designated by the MNB Governor, present documents submitted in writing at least five business days in advance and cooperate with the audit.

Between regular reviews, the supervisory board would conduct extraordinary audits with the assistance of the New Organisation to examine any information that has come to its attention, including tips about the organisations and processes within its competence.

Broad duty to cooperate

The Bill introduces a comprehensive duty to cooperate with the New Organisation directed by the supervisory board. This duty applies to every organisational unit of the MNB, and to companies majority-owned by the MNB and foundations established by it. Within the supervisory board’s statutory remit, they would have to answer requests in full, make the necessary documentation available, point out relevant connections and fully contribute to the completeness of the audit.

The Bill would also retain an existing requirement for the executive board to inform the supervisory board without delay of findings by its internal audit unit that fall within the supervisory board’s competence.

New rules on composition, election and term of office

The Bill would change how the four parliament-appointed members of the six-person supervisory board are nominated and selected without changing the board’s size. Parliament’s Standing Committee on Budgetary Affairs and its Standing Committee on Economic Affairs would each propose two members, all four of whom would be elected by parliament. The supervisory board would also continue to include a representative of the minister responsible for public finances and an expert appointed by that minister. Parliament would vote on the four committee-proposed members simultaneously, in a single group.

The procedure for electing the chair would also change. Currently, the chair is nominated by parliament’s governing-party groups. The chair would be nominated, from among the four committee-proposed members, by the persons nominated as supervisory board members together with the two ministerial delegates and would be appointed by parliament.

The term of office would no longer be linked to the mandate of the MNB Governor. Members would serve a four-year term, which could be extended once for another four years.

Remuneration reduced by half

The Bill would significantly reduce the remuneration of supervisory board members. The chair’s remuneration would be reduced from 70% to 35% of the MNB Governor’s monthly base salary, and the remuneration of the other members from 60% to 30%.

What this means in practice

The Bill does not change the MNB’s monetary policy or financial-supervisory powers, but focuses on governance and ownership control. The most immediate practical impact is on companies majority-owned by the MNB and foundations established by it. Their leadership would report at least quarterly, be subject to extraordinary audits, and would have to cooperate fully and provide all requested documents. Banks and other financial institutions would not be subject to these new ownership-control audits merely because they are supervised by the MNB.

Implementation and next steps

If enacted as drafted, the amendments would enter into force on the 16th day after publication in the Hungarian Official Gazette. The MNB would then have 30 days to update its internal organisational and operating rules so that the supervisory board can exercise its new powers.

The Bill removes the MNB Act’s existing provision identifying certain provisions as cardinal legislation, a change that the explanatory memorandum links to the Seventeenth Amendment to Hungary’s Fundamental Law. The Bill, however, also records that prior notification to the European Central Bank has taken place.

This draft legislation remains subject to parliamentary consideration and may be amended before adoption. Companies that are majority-owned by the MNB and foundations established by it should monitor its progress and, if adopted, prepare for regular hearings and information requests.

For more information on the proposed amendments and their implications for MNB-related entities, contact your CMS client partner or the CMS experts who contributed to this article.

The article was co-authored by Máté Mondok.