Full Report (Hebrew)

of Banks Dr. Hedva Ber presented the semiannual report on common banking fees
for households to the Knesset Economic Affairs Committee this week. The report is
based on reports by the banks and credit card companies of actual revenue from
fees they collected in the first half of 2016.


Supervisor of Banks said, “In 2016, the Banking Supervision Department took
additional measures to reduce fees for households, which are expected to
contribute to lower fees in 2017 as well. In addition, our call to the banks to
review their fee schedules and to examine other reductions of fees for actions
with low costs has led the banks to lower or cancel fees, such as the
cancellation at most banks of the fee for handling estates and inheritances;
exempting pensioners from the former Soviet Union from paying fees at most
banks; granting benefits or exemptions at most banks from current account fees
for Holocaust survivors; and other reductions as detailed in the report. The
Banking Supervision Department will continue to monitor the banks’ fee
schedules, and will continue to act toward reducing any excessive fees that
there may be.


the initiatives taken by the Banking Supervision department to reduce fees, I
call on households to be active in their interface with the banks, thereby
further reducing the fees that they pay. About 2 million households and small
businesses can save if they move to the basic or expanded fee tracks (ask about
them at your bank), and all customers can save money on fees if they do more of
their banking through customer-executed transactions, such as using an ATM
machine, via the Internet or a cellular application, instead of through
teller-executed transactions. It is less expensive, simpler, and more
convenient, once you get used to it.”


highlights of the report:

·      An
over-all analysis of banks’ revenue from fees shows that in recent years, there
has been a continued decline in fees as a share of total assets.
decline is derived from fee reductions required by the Banking Supervision
Department—mainly fees to households; stability in the other fees, and a
continued increase in banking activity and assets. The monthly cost for holding
and using a credit card was NIS 10.5, on average.


·      In
the first half of 2016, the decline in the monthly cost of managing a current
account continued,
and the monthly cost of using a credit card
remained stable. Over the past five-and-a-half years, there has been a decline
of about 15.6 percent in the cost of managing an account.


·      As
a result of the Banking Supervision Department’s call at the beginning of 2016
to review and find excessive fees, a variety of fees were reduced. For
Bank Hapoalim, Leumi and Discount cancelled the fee for
handling estates and inheritances[1];
Discount Bank, Mizrahi-Tefahot and First International exempted those receiving
pensions from the former Soviet Union from paying fees[2];
Discount, Leumi and Mizrahi-Tefahot granted benefits or exemptions from current
account fees to Holocaust survivors; Leumi exempted customers from fees for
generating standard statements (other than housing loans); First International
eased fees for services to small businesses; and Hapoalim set levels for the
foreign exchange transfer fee (transfers up to $200). The Bank of Jerusalem has
a full exemption from current account fees for customers, and there are banks
that exempt certain population groups from fees, such as students, soldiers,
and so forth.


·     During
2016, about 200,000 senior citizen customers and those with disabilities were
transferred to the basic fee track at the request of the Banking Supervision
The process was carried out following an examination by
the banks regarding the worthwhileness for each individual customer.


·    About
2 million customers can save on fees through the simple step of moving to a fee
track created by the Banking Supervision Department, and joining the
half-million customers that have already moved and saved.
Banking Supervision Department calls on household and small business customers
to examine with their bank the feasibility of moving to a fee track.


·      Following
measures initiated by the Banking Supervision Department in 2016, a number of
guidelines are expected to come into force in 2017 that will lead to a further
reduction in fees,
increased transparency, and an improvement of the
banking customer’s situation. Within this, all fees for customer-executed
transactions will be reduced relative to the fees for teller-executed
transactions. The Banking Supervision Department’s objective in this
requirement is to ensure that the savings from streamlining at the banks will
be passed on to the consumers. In parallel, the Banking Supervision Department
regulated the fees for withdrawing cash from ATMs, in view of the process of
branch closures. Alongside these, the Banking Supervision Department approved
differential fees for a bank customer carrying out a teller-executed
transaction (voucher payments or obtaining change) and for someone who is not a
customer managing an account at that bank.


·      The
report also presents the number of ATMs in the banking system. The picture that
emerges is that there is a rapid upward trend in the number of ATMs despite the
process of closing branches.
Between 2013 and June 30, 2016 (a
period of three-and-a-half years), there was an increase of about 43 percent in
the number of ATMs. In the first six months of 2016, there was an increase of
5.7 percent compared with 2015. These machines have become more sophisticated,
and enable customers to conduct a large part of their basic account management
activity through the machines. In addition to cash withdrawals (including
foreign currency), customers can deposit cash, deposit checks, obtain a loan, open
a deposit, and more. In addition to the bank ATMs, there are also nonbank ATMs,
which are not supervised by the Banking Supervision Department, where fees are
significantly higher than those of the banks’ machines.


·     Pension
advising for bank customers
– With the aim of encouraging the banks
to operate in the area of pension advising, which is an area of tremendous
importance for customers, a change was made in 2016, in conjunction with the
Capital Market, Insurance and Savings Division of the Ministry of Finance, as
part of which the Banking Supervision Department approved the addition of a
pension advising service to the fee schedule. The Banking Supervision
Department expects this step, alongside others made by the Capital Market
Division during the year (such as the publication of draft regulations to
enable the banks to market Managers Insurance policies), will lead to the
increased presence of the banks in the area of pension advising to customers,
and thereby increase competition in the field. It is emphasized that alongside
the fact that the service is essential and of value to the customer, it is a
voluntary service, and the customer can always obtain the service outside the
banking system, or not obtain it at all.


·      The
Bank of Israel calls on the public to make informed consumer decisions on
banking products and services
, and provides information and tools to
customers on its website, including advice for saving costs.

First International, Otsar Hahayal and Masad announced at the beginning of 2017
that they are cancelling the fee for handling estates and inheritances.

At Hapoalim and Leumi the exemption has been in place for some time.