Bank of Israel Fee Reforms Take Effect, Easing Customer Costs

Beginning Thursday, October 1, bank customers in Israel will see changes to certain fees as the first phase of the Bank of Israel's fee reform goes into effect. Announced in June, the reform aims to simplify banking services, reduce costs for consumers, and improve the ability to compare offerings between different banks.

A key change impacts holders of debit cards, with a monthly fee cap set at NIS 7, down from an average of approximately NIS 9 previously. This is a maximum charge, allowing banks to offer lower fees or waivers. The cap applies only to debit cards, not credit cards.

Additionally, three specific fees will be eliminated: charges for writing a check returned for technical reasons, account location services, and processing inheritances and estates. The Bank of Israel clarified that the check fee removal applies only to technical returns, not to checks returned due to insufficient funds. The actual savings for customers will vary based on their individual usage and existing bank agreements.

The banking supervisor noted that account location services are rarely used by banks, and the inheritance processing fee is also largely unused. Daniel Hachiasvili, the Supervisor of Banks, stated that basic account services should be accessible and affordable for everyone, and the reform addresses the complexity that makes it difficult for customers to understand and compare prices.

The next phase of the reform is scheduled for July 1, 2027, which will alter the payment structure for basic account activities. Customers will be automatically enrolled in a service covering up to 100 monthly transactions for a maximum of NIS 10, with a NIS 5 cap for accounts with two or fewer transactions. Banks may implement these changes earlier according to regulations.