The Ministry of Justice has issued a memorandum of law, which will allow customers to transfer a current account to another bank without compromising the payment of checks written to the previous account ordinance
Increasing competition between banks
Photography:
Joshua Joseph
The law is intended to facilitate the transition between banks: Justice Minister Avi Nissenkorn yesterday approved the distribution of the law memorandum for electronic clearing of checks, to strengthen competition between banks in Israel.
In recent years, banks in Israel have enjoyed a limited market and a wide range of operations.
This fact hurts customers, who suffer from low bargaining power, which is reflected, among other things, in high fees and limited account conditions.
The new law is intended to ensure that the clearing will be adapted to the customer's request to transfer from bank to bank, and will establish special arrangements that will allow the transfer in a convenient, reliable manner and without charging an additional fee for transferring the activity.
The law is expected to remove the existing barriers in the transition from bank to bank and increase competition in the centralized banking market and the bargaining power of the customer vis-à-vis the bank.
The new move is part of the system for moving bank accounts at the push of a button, at the initiative of the Ministry of Finance and in cooperation with the Bank of Israel.
Now as mentioned the mobilization will also include checks.
The launch of the project is expected in September 2021, and may even be postponed to early 2022.
Justice Minister Avi Nissenkorn said that "the law is intended to complete the interbank mobility reform. It will oblige banks to carry out checks for the customer, increase competition and strengthen the bargaining power of the citizen."