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As of tomorrow, August 1, 2013, Amendment 2 to the Banking Regulations (Customer Service)(Fees), 5768–2008 will come into force. According to the Amendment, the definition of a “small business” is being changed from a business with an annual business turnover of no more than NIS 1 million to a business with an annual business turnover of no more than NIS 5 million.

The Amendment will enable more businesses in Israel to be defined as small businesses, which will entitle them to be included in the retail price list (the price list for households and small businesses), whose prices are lower than, or at most equal to, those set in the price list for large businesses for the same services.

In order to take advantage of this entitlement, the business must send an annual report (such as a VAT report) to the bank where it manages its account, stating that its business turnover does not exceed NIS 5 million per year.  Upon presentation of the report to the bank, the bank will classify the account as a “small business” account.  As a direct result, the retail price list will apply to that business.  The classification will remain valid for one year, and its renewal will be conditional on the issuance of up-to-date documents, in accordance with bank fee regulations.

In addition, in order that small businesses are made aware of their rights as per the new amendment, and their ability to minimize their expenses, the Supervisor of Banks is asking the banks to send their business customers notices announcing the change and its ramifications.