Bank of Israel supervisor Zaken to step down in June

New rules limiting banking fees go into effect on Sunday.

The Bank of Israel building in Jerusalem (photo credit: REUTERS)
The Bank of Israel building in Jerusalem
(photo credit: REUTERS)
Bank of Israel Supervisor of Banks David Zaken on Sunday said he will step down on June 30 after four-anda- half years in the position.
“I am proud of the targets achieved and am set to end a long period in the Banking Supervision Department with a feeling of satisfaction,” Zaken said, pointing specifically to increasing stability in the system and improving customer relations.
BOI Governor Karnit Flug, who will form a search committee to recommend a replacement, praised him for his leadership and dedication.
“Dudu worked with the deep understanding that he was a public servant, working only for the public good and with that sense of mission he worked untiringly to strengthen the stability of the banking system and, at the same time, worked consistently and uncompromisingly to increase the competition and fairness of the system vis-à-vis and for the good of the public,” she said, referring to him by his nickname.
Coincidentally, several of Zaken’s new bank regulations slashing banking fees went into effect Sunday, including the complete elimination of fees for debit-card transactions.
“The objective of the amendment is to increase the use of this means of payment as an alternative to the use of cash,” according to a press release on the new banking fees.
Zaken also eliminated charges for first-time confirmation of account ownership, which range from NIS 13 to NIS 55, and limited fees for cash transfers through the Zahav clearing system of under NIS 1 million. As a result, the average fee for such transactions is expected to fall from NIS 39 to NIS 6. A fee for managing housing loans, already limited in the past to NIS 2 a year, also was nixed.
Credit cards no longer will be able to charge fees for deferred payments and simplified rules for calculating fees for transactions in foreign currency took effect.
“Fees that are an impediment to competition or a market failure have been canceled, with the aim of simplifying the banking service products, increasing transparency to the customer – particularly households and small businesses – and increasing customers’ ability to compare,” Zaken said.
Under his tenure as banking supervisor at the central bank, where he began his career 25 years ago, the Bank of Israel adopted Basel III standards for capital adequacy and acted to reduce the concentration in banks credit portfolios and reduce mortgage- related risk. He helped create a charter for licensing credit unions, made it easier to open bank accounts online, simplified the process of changing banks, and forced banks to offer inexpensive basic services.
He was also a member of several interministerial committees such as the Concentration Committee and the Committee to Assess Debt Restructuring Proceedings.