BUDAPEST, Sept 10 (Reuters) - A Hungarian court rejected on Wednesday a lawsuit brought by the local unit of Austrian Erste Bank to challenge a new law mandating refunds to clients on loans, Judge Csaba Balsai said.
The first-degree ruling is open to appeal.
The refunds, which the government says are to compensate clients for past unfair lending practices, could cost the bank sector in Hungary up to 3 billion euros ($3.87 billion), the government has said. Banks have challenged the legislation in court. (1 US dollar = 0.7745 euro) (Reporting by Marton Dunai; editing by Susan thomas)