Bank fee reform starts taking shape

The number of bank fees at the country's banks will be reduced from the current 400 to 70, while certain charges will be subject to central bank-regulation.

bank reform 88 224 (photo credit: Ariel Jerozolimski)
bank reform 88 224
(photo credit: Ariel Jerozolimski)
The number of bank fees at the country's banks will be reduced from the current 400 to 70, while certain charges will be subject to central bank-regulation, the Bank of Israel's Supervisor of Banks Rony Hizkiyahu, disclosed on Monday. "The customer must know what he is paying for and be able to compare the fees charged by the banks. For this purpose, if the market fails to adjust to the new conditions, we will act to create competition in cases in which we believe that fees are too high and determine the charge of a fee for a certain bank service," Hizkiyahu said, speaking at the Knesset Economics Committee discussion meeting on the implementation of the bank fee reform. Hizkiyahu said the bank fees that were under review for regulation under the new reform were those on bank-to-bank transfers, which cost NIS 43, and bank statement retrievals, which cost NIS 18 per page. In addition, the Bank of Israel will post a price comparison matrix of the banks' fees on its Web site. "We don't expect the banks to make up for the losses from the reduction of fees by raising other fees," said Hizkiyahu. He added, however, that for a number of bank services, the secondary fees currently charged would remain while others, which entailed eight fees when one would suffice - such as those charged on current accounts or securities - would be scrapped. The Knesset Economics Committee will reconvene a meeting in October when details of the bank fee reform will be presented in full. Separately, at the Knesset Finance Committee, senior representatives of the banks and committee members discussed the controversial issue of the launch of pension advisory services, which will be offered by the banks. The meeting was convened following an agreement between Bank Hapoalim and the Supervisor of Capital Markets, Insurance and Savings, Yadin Antebi, under which the bank will postpone its entry into the field of pension advisory services by three years. "Judging from the main impression ending the meeting, the committee would have voted unanimously to let the banks enter the pension advisory services field all at the same time," said Knesset Finance Committee chairman MK Stas Meseznikov. "The majority of the members of the committee were concerned that the late entry of the large banks would hurt customers." In recent months, Antebi had been trying to convince the country's two biggest banks, Bank Hapoalim and Bank Leumi, to agree to offer pension advisory services in a few years time to give entry preference to small- and medium-sized banks and to ensure fair competition between all the institutions. Antebi had been arguing that the two large banks were dominating the distribution channels for financial instruments across the country, limiting the other banks' chances to compete. "We did not accept Antebi's agreement like Bank Hapoalim as we believe that all the banks should enter at the same time," said Deputy CEO of Bank Leumi, Giora Ofer, who warned that a delayed entry of the bank would hurt hundreds of thousands of customers. Last month, Bank Leumi said it would proceed with a request for a pension advisory license after it completed the sale of the last of its asset management businesses.