Legislation and Regulations

​ The Bank of Israel operates in the Zahav system in three different roles, since it operates the system, participates in it as the government's banker and also operates in it as a central bank, in the monetary arena for example. This range of activities necessitates a legal definition for the Bank of Israel's functions in the payment and settlement systems, its supervisory authority, and its obligations as operator of the system.

The Payments System Law, which was drafted by the Bank of Israel, regulates additional legal issues, such as the finality of payments and bankruptcy by one of the participants in the payment and settlement systems.

Another matter requiring legislative amendments is the check truncation. Since electronic files are sent to the banks' branches instead of checks, it is the electronic file that will be returned in the event of a check that is not honored. This situation requires a legal amendment, which will permit the banks to return scanned checks instead of the original paper.

Apart from legislative amendments, the Bank of Israel has signed a number of agreements regulating the networks of relationships with the entities operating in the Zahav system. This include agreements with the commercial banks, the Paper-Based Clearing House (BCH), the Automated Clearing House (Masav) and the stock exchange clearing houses (TASE). Regulations and procedures for Zahav system operation have also been determined.

Collated in the following table are the laws, regulations and relevant announcements concerning the activity of the payment and settlement systems in Israel.​​​