What the new credit framework costs

A Bank of Israel spokesman said no guidelines regarding what the banks can charge for resetting customers' accounts had accompanied its directive to implement the law, and that each bank had carte blanche to charge what it wished for the arrangements.

By AVI KRAWITZ
July 5, 2006 07:55

With the overdraft reforms in place and consumers getting used to the idea of having limitations on their bank credit, they may not be aware of the charges involved in setting their overdraft facilities. A Bank of Israel spokesman said no guidelines regarding what the banks can charge for resetting customers' accounts had accompanied its directive to implement the law, and that each bank had carte blanche to charge what it wished for the arrangements. In so doing, customers can expect a pay a one-time fee of between NIS 45 and NIS 150 on overdraft provisions ranging between NIS 3,000 and NIS 15,000 depending on the bank, while the cost of fixing an overdraft above that level increases with the credit available and can reach over NIS 2,000 for larger facilities. On lower level overdrafts below NIS 3,000, the cost ranges from no charge and NIS 60 between the five major banks Leumi, Hapoalim, Discount, First International and Mizrahi Tfahot.


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