News Column

BOI to cancel mortgage handling fees

July 29, 2014

By Irit Avissar, Globes, Tel Aviv, Israel

July 29--The Bank of Israel today published a series of measures concerning bank fees. The Bank of Israel Advisory Council will discuss these matters in about a week's time.

The Bank of Israel is seeking ways to ease the burden of bank fees for customers, starting with the NIS 2 monthly mortgage handling fee. The cancelation will apply to both new and existing mortgages.

The Bank of Israel is also canceling collection fees on ordinary loans. This question was already addressed in the reform of fees carried out several years ago. At the same time, the banks were allowed to charge fees on loans granted before July 2008. The Bank of Israel is now seeking to eliminate this charge altogether.

Another area in which the Bank of Israel is seeking change is in eliminating bureaucracy involved in the definition of a small business. As of now, a small business is defined as one whose sales turnover is up to NIS 5 million annually. A business meeting this definition is entitled to the same fee rates as households. Up until now, however, every small business had to prove once a year through its annual report that it met these criteria. The Bank of Israel now says that this status will be automatically continued, except for the bank demanding proof in certain circumstances as a result of its assessment that the business no longer fits the definition.

The Bank of Israel has also decided that in cash transfers up to NIS 1 million in the Zahav system, small businesses will pay only a clerk's fee (less than NIS 7), instead of the current charge of NIS 37-57.


(c)2014 the Globes (Tel Aviv, Israel)

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Source: Globes (Tel Aviv)

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