Central Bank: Switching banks made easy since December 1

New amendment will make it possible for bank customers to transfer their standing orders from an old credit card to a new one quickly.

December 7, 2010 22:35
2 minute read.
The Bank of Israel.

The Bank of Israel.. (photo credit: Ariel Jerozolimksi)

The Bank of Israel is initiating an information campaign on Wednesday to raise consumer awareness of the implementation of new regulations which will streamline the process of switching banks and is expected to encourage competition in the banking system.

“The Banking Supervision Department is continuing in its efforts to make it easier and more efficient for customers to switch banks, in order to enhance competition in the banking system through the removal of barriers,” stated the central bank.

On December 1 this year, an amendment to the directives for Proper Banking Conduct went into effect which regulates the process for transferring standing orders (authorizations to debit a credit card) from a customer’s old credit card to his new one, as a result of moving to a new bank or switching credit card companies.

The amendment will make it possible for bank customers to transfer their standing orders from an old credit card to a new one quickly, efficiently and securely. In this way, the customer will be spared the need to provide the details of his new credit card to every business with which he has a standing order.

The central bank recommends that, before switching banks, a customer should request an “information form” – which twice a year is free of charge – to examine his financial status at the bank, and to consider the advisability of transferring an account to another bank.

The form specifies all the assets and liabilities a customer has at the bank and the costs involved in their early payment, details of the credit facility in the account, fees that were charged to the account in advance, the existence of powers of attorney, and so forth.

Armed with this information on his current banking activity and an examination of the conditions offered by the various banks, a customer can ask his bank to offer better conditions. If the request is denied, the bureaucracy of the transfer to another bank is expected to be eased.

A customer can choose whether to transfer all of his banking activities or only some of them – e.g., making deposits in another bank, transferring only the current account activity, obtaining loans in another bank, or obtaining a credit card issued directly by a credit card company and not by the bank in which the account is managed.

In practice, on opening an account the customer will provide his new bank with a request to transfer his standing orders from his old credit card to his new one. The new bank will provide the details of the customer’s new credit card, along with his personal details and the number of his old card, to the old bank.

The old bank, in turn, is obligated to notify all businesses with which the customer had standing orders of the cancellation of the old credit card and the details of the new one, so that they will continue to debit the customer on his new card.

The total fees involved in transferring activity to another bank resulting from closure of an account are limited to NIS 40, not including the fee for early payment and expenses applying to the account, such as payment to a third party.

The total fees involved in transferring the activity of a credit card resulting from closure of an account are limited to an additional NIS 40.

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