Bank Leumi (TASE: LUMI) is following Bank Hapoalim (TASE: POLI): beginning in January it will pay interest on credit balances in current accounts. The interest will be slightly lower than the interest paid on deposits, which is already low, in order to encourage customers to save and deposit money.
Bank Leumi deputy CEO Zeev Nahari presented the plan to Knesset Economics Committee chairman MK Ophir Akonis (Likud) yesterday. 18 months ago, Akonis initiated a private member's bill to require banks to pay credit interest.
Now that both Bank Hapoalim and Bank Leumi, which account for two-thirds of household current accounts in Israel, are both offering interest on current accounts, sources believe that legislation to compel the bank to pay credit interest will not be necessary. Israel Discount Bank (TASE: DSCT), Mizrahi Tefahot Bank (TASE:MZTF), and First International Bank of Israel (TASE: FTIN) are expected to follow suit.
Discount Bank and First International Bank said in response the matter was under consideration. Mizrahi Tefahot Bank, which did not comment, already has a similar plan, but only for specific categories of customers.
Published by Globes [online], Israel business news - www.globes-online.com - on December 6, 2010
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