The Price Controller in the Ministry of Industry, Trade and Employment today published a general permit for banks to charge a fee of NIS 1.21 for four basic transactions in current accounts: cash withdrawals from ATMs; deposits of checks over the counter in a branch; debits for the use of a customer's credit card; and direct debits.
The Bank of Israel stated today that the general permit is a prelude to the implementation of the package deal regarding banks' fees, and constitutes an integral part of it.
The package deal which was accepted by the Knesset Economic Committee, and the final version and details of which were formulated by the Supervisor of Banks, becomes effective on December 1, 2005. Its implementation is expected to result in a significant reduction in the cost of managing current accounts for most private customers.
As part of the package deal, the charge per entry on bank statements and the fixed bank charge paid by private customers are abolished. Every customer can choose from the following options:
1. Payment of a fee of NIS 1.21 per basic transaction in the account, with a minimum monthly charge of NIS 10 per account (banks may, of course, continue to offer reduced fees to customers such as pensioners, students, and soldiers).
2. A fixed monthly payment of NIS 18 for a basket consisting of a limited number of basic activities, with an additional charge of NIS 1.21 per transaction in excess of the quotas.
3. Other combinations of activities that banks may offer their customers.
With the intention of making it easier for customers to transfer accounts from one bank to another, the package deal also incorporates significant cuts in certain fees, concurrent with the coming into effect of the supervisor of banks' directive regarding customers' transfer of activity or closing of accounts.
Banks may charge a customer wishing to close an account and transfer to another bank a total fee of not more than NIS 40, even if the total fees due for all the steps necessary to transfer the account exceed that amount (however, banks may also charge the customer for sums they have paid to a third party, such as a broker abroad).
The directive on transferring activity and closing a bank account obliges a bank to pass to any customer wishing to examine the possibility or profitability of transferring his activity to another bank detailed information on all his assets in and liabilities to the bank, as well as any other information required to reach a decision. The directive applies to activity in the bank account and to debit cards issued by the bank.
The Bank of Israel stated that, "the Supervisor of Banks urges customers to perform their own market research in regard to the fee arrangements offered by the different banks.
"The Supervisor of Banks also urges customers to arrange the credit limit in their accounts before the directive prohibiting deviations from the agreed limit comes into effect on January 1, 2006. Customers should also carry out market research regarding the interest offered by the various banks on the credit facilities and to check whether it is worthwhile transferring to a bank that offers better terms".
Published by Globes [online], Israel business news - www.globes.co.il - on Wednesday, November 23, 2005