The banks in Israel.
The Bank of Israel is confident that the new move will promote a reduction in the fees we currently pay on the current account (Photo: ShutterStock)
The main points of the Zionists and the routes
The supervision of banks at the Bank of Israel published a draft today for public comment, as part of a move aimed at reducing the burden of fixed fees on private accounts of households and small businesses.
The main changes:
1. Updating the billing method for current fees ("the best route mechanism") for private customers.
2. Expanding the group of small businesses to which the discounted rate will apply.
3. Changing the default by adding a small business to the discounted rate, in order to create more options for customers With extensive banking activity, the next step is prioritized:
4. Updating an extended route plus
according to the payment method that exists today, bank customers pay for each current account operation separately, unless they have chosen to join one of the existing route services - a basic route at a controlled price of NIS 10 per month or an extended route whose price varies from bank to bank, and ranges between NIS 20-30 (see appendix below).
According to the new payment method, the customer will not be required to actively join the route, but the bank will calculate for the customer which is the cheapest payment method for him each month, according to the current account operations (operation by a clerk and operation through a direct channel) that he actually carried out that month, and the payment that will be charged accordingly.
The Bank of Israel website publishes a fee calculator in which simulations can be made for different scenarios. The cheapest result in each scenario is the amount the customer will pay after updating the method. Here are some examples:
Yes, the supervision of banks promotes the expansion of the group of small businesses to which the discounted rate will apply by
defining "Small business" was expanded, from a business whose business turnover is up to NIS 5 million, to a business whose business turnover is up to NIS 10 million. In this way, more businesses will be able to benefit from the discounted retail commission rate.
Changing the default for adding a small business to the discounted rate is also being considered: until now, a business was required to submit an annual report to a banking corporation in order to add it to the discounted rate.
In accordance with the new draft guidelines, the default has been changed.
All corporations will be defined as a "small business", and the banking corporation will be entitled to request an annual report in cases where it has reasonable grounds to assume that the corporation's turnover exceeds NIS 10 million.
In order to prevent abuse of the benefit, it was determined that in cases where the banking corporation's requirement to submit an annual report was not met within 90 days, it would be possible to classify the business as a "large business".
Examples of rates for operations with a small number of account operations (Photo: Bank of Israel)
An example of rates for customers who perform a moderate number of account operations (photo: Bank of Israel)
An example of rates for customers who perform a large number of account operations (photo: Bank of Israel)
Extended route update plus
This route remains as a route that a customer can choose to join voluntarily, and is not included in the calculation described above.
This route is intended for customers who maintain an extensive banking activity and are interested in a route that gives them additional value, beyond the basic services (operation through a direct channel and operation through a clerk).
Today, this route includes the amount of current account operations included in the expanded route as well as additional services for the banking corporation's choice. According to the draft update, this route will be expanded, so that the amount of clerk and direct operations included in it will be unlimited, with the aim of distinguishing it from the other two routes so that it will be a unique and competitive product We note that the prices of the current operations and the prices of the routes, including the extended plus route, were recently subject to supervision, so that it will not be possible to increase their price without the approval of the supervision of the banks.
The Supervisor of Banks, Yair Avidan (Photo: Reuven Castro)
The Supervisor of Banks, Yair Avidan
: "The Supervisor of Banks is working to promote a number of significant steps in the field of banking system fees, the purpose of which is to make it easier for the public and to improve the payment mechanisms for basic banking services, so that they are more adapted to the actual actions of the customer and result in the cheapest possible payment for the customer. We are promoting a new billing method for current account transactions, according to which in each round of billing the customer will be charged the lowest possible price automatically, as well as a number of additional steps that will allow more small businesses to benefit from the discounted fee rate.
These steps are part of a set of proactive steps that we are promoting for the benefit of the customer base and which will transfer the power to them and allow them to consume basic banking services at a fair price.
I urge customers to make use of the multitude of options available to them in order to compare the various financial service providers, whether from banks or from other regulated entities."
Chairman of the Economic Committee, H.
, today congratulated the Bank of Israel on the steps it intends to take in order to further reduce bank fees and increase competition.
MK Biton mentioned that in the outgoing Knesset, the committee led by him led a series of changes designed to reduce costs, increase competition in the banking industry and help the general public, including the establishment of the fund for credit assessors, increased transparency in the mortgage market, approval of the open banking reform (Zap Financial) designed to make it easier for customers perform price comparisons, increase competition between banks and lower costs for consumers, and much more.
MK Biton added that the steps the Bank of Israel intends to take are positive and in the right direction, and called on both the central bank and the next coalition to continue the war on the cost of living and to take additional steps that will increase competition and help all citizens Israel.
Chairman of the Economic Committee, MK Michael Biton (Photo: Reuven Castro)
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