Money Shekels bills 521.
(photo credit: Courtesy)
Household customers are paying 13 percent less on average for service charges on
their checking accounts since the bank-fee reform was instituted in July 2008,
the Bank of Israel said Monday. They also are paying 20% less on average for
credit-card fees due to increased competition, the central bank said.
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part of the reform, the number of bank fees were cut to one-third,” David Zaken,
the incoming supervisor of banks, said Monday at a session of the Knesset
Economics Committee. “Banks are luring new customers with fee discounts and
exemptions in various marketing campaigns. We have recently initiated a campaign
to raise public awareness on eased rules for changing from one bank to another,
in an effort to encourage customers to compare available conditions.”
bank-fee reform reduced the number of fees from 198 to 72. Certain fees, such as
for credit frameworks, were abolished, while some fees on checking-account
transactions were raised.
The Bank of Israel survey presented at the
committee meeting showed that among all banks, Bank Yahav was the cheapest by a
“substantial margin” for monthly fees on checking-account services.
International Bank of Israel was the most expensive.
Among the five
largest banks, Bank Hapoalim was the cheapest.
Credit-card fees charged
by Visa Cal, which is issued by Israel Discount Bank and FIBI, were the most
expensive, and those charged by Isracard, issued by Bank Hapoalim, were the
“Greater transparency on bank tariffs following the bank-fee
reform may have increased customers’ awareness of fee differences, but there is
still a long way to go to help strengthen the bargaining power of the customer,”
Shlomi Dagan, an economist at the Israel Consumer Council, said
Household monthly spending for checking-account transactions
including credit frameworks has decreased 13%, from NIS 16.24 in July 2008 to
NIS 15.22 in the third quarter of 2010.
Bank Yahav’s average monthly fees
on checking accounts, including credit frameworks, were the lowest in the
banking sector, at NIS 3.12 for July through September. At Hapoalim and Bank
Leumi, which serve 70% of household banking customers, the fees were the
cheapest among the five largest banks, at NIS 14.52 and NIS 14.65, respectively,
compared with NIS 20.11 at FIBI.
In reaction, FIBI said the central
bank’s report had considered a limited number of fees, which represent a small
number of bank-account management fees. It said other morecrucial fees, such as
interest spreads on loans, overdrafts and deposits, had not been included in the
comparison, saying it offered competitive charges. In addition, FIBI said it
offered the cheapest deals for young people, soldiers, students and
As part of the reform, bank tariffs, fees and commissions for
checking accounts have become cheaper for customers who use direct-banking
services, which were an average of NIS 1.69 per transaction in the third quarter
of 2010. In practice, fees were 25% lower, at an average of NIS 1.26 per
transaction, as bank customers negotiated, the report said.
from NIS 1.35 per transaction at Hapoalim to NIS 2.10 at
Transactions via teller-assisted services, which are mainly used by
the elderly and the poor, are more expensive.
Teller-assisted services at
the five largest banks were charged at an average of NIS 6.10 per transaction
before discount and at an average of NIS 3.31 after a discount of 46%. Following
a negotiated reduction, teller-assisted service fees were highest at Hapoalim,
at NIS 5.12, and cheapest at FIBI, at NIS 2.17.
The five largest banks
offered a special monthly tariff for the management of checking account
transactions for certain population groups such as young people, students,
pensioners and soldiers, the report said. FIBI’s monthly fee of NIS 3.50 was the
cheapest, while Bank Mizrahi’s was the most expensive, at NIS 8.40.
the beginning of 2009, average monthly credit-card maintenance fees dropped
21.4%. The average monthly fees for Isracard, which has 39% of the market, were
NIS 3.95. Fees for Leumi Card, which has 32% of the market, were NIS 7.11. Fees
for Visa Cal, which has 29% of the market, were NIS 10.36.