The Bank of Israel will not interfere with bank fee charges but will help define and set them to ensure transparency and boost competition, Supervisor of Banks Rony Hizkiyahu said Tuesday.
"The most important goal is to create competition by creating full transparency and not by regulating prices," he said at a conference on the concentration of banks in Israel at Bar-Ilan University, just minutes after the Knesset passed the Bank Fees Supervision Law in its second and third readings.
"I will demand that the banks become more efficient, which could involve cutting salaries and minimizing the workforce," Hizkiyahu said. "In an ideal world, we would see the banks lower salaries and not raise bank fees."
Other speakers questioned the central bank's intention to refrain from interfering with bank fees.
"I still believe Hizkiyahu will, at the end of the day, need to interfere in the bank fee charges because of pressure by the public and MKs," Union Bank chairman Ze'ev Abeles said.
On Monday, the Knesset Bank Fees Inquiry Committee unanimously approved the Bank Fees Supervision Law, giving the Bank of Israel authority over fees and drastically reducing the number of fees customers will be charged, while imposing harsh penalties on institutions that don't adhere to the new rules.
"Even if the banks cut their fees, they will soon be taking the money from somewhere else by, for example, charging higher credit fees," said former Finance Ministry director-general Prof. Benzion Zilberfarb.
The law stipulates that banks may not collect two fees for the same service; they must publish a list of fees on a quarterly basis; and they are no longer allowed to charge customers for switching from one institution to another.
Banks also will be prohibited from instituting new fees without prior permission from the banks supervisor.
Join Jerusalem Post Premium Plus now for just $5 and upgrade your experience with an ads-free website and exclusive content. Click here>>