The Semiannual Report to the Economic Affairs Committee on Prices of Common Banking Services for Households
Main points of the report:
- Over the course of the past eight and a half years, there has been a decline of approximately 29 percent in the ratio of banking corporations’ total income from fees relative to the scope of activity. In the first half of 2017, the ratio was stable compared to the year of 2016.
- The average monthly cost for a household and private banking account, in the first half of 2017, was approximately NIS 25.1, compared with NIS 24.8 in the year of 2016.
- During the past six and a half years (2011–June 2017) there was a decline of approximately 14.6 percent in the average total monthly cost for a household and private banking account. This cost is made up of the cost of a current account, which declined by about 33 percent, and the cost of credit cards, which increased by about 27 percent, an increase that derives from the trend of growth in the number of cards held by customers in a single account.
- A significant step was carried out this year in reducing fees: in 2017, several guidelines went into effect, resulting in a further reduction in fees in respect of banking services. Within this framework, beginning from November 1, 2017, the fees for all services provided by direct channels were reduced vis-à-vis the fees charged for teller-executed transactions. The Banking Supervision Department’s goal with this requirement is to ensure that the savings from increased efficiency are rolled over to consumers.
The Supervisor of Banks said, “There are numerous means available to customers for reducing the costs of managing a current account. Thus, the use of direct channels (ATMs, the Internet, mobile device applications) costs approximately 75 percent less than the same services executed via a teller, is much more available (24/7) for the customer, and does not require traveling to the bank’s branch. Joining a fee track can also lead to a marked reduction in cost—joining the basic track, with a monthly cost of NIS 10 at most banks, is more worthwhile than paying for each service separately. Joining is easy and simple and can be done via telephone, the banking corporation’s website, or by traveling to the bank branch.
During the course of the year, the Banking Supervision Department took another significant step, which continues the trend of reducing households’ costs of banking services—the banking corporations were required to grant a discount in the fee schedule for customer-executed transactions, compared with the fee charged for the same transaction executed via a teller, for all banking activities, and to present customers with a table comparing customer-executed transaction fees and teller-executed transaction fees, for all services offered via direct channels. For a comparison of selected fee schedules, click here (LINK).
The Bank of Israel calls on the public to consume banking products and services in an informed manner, and invites the public to read the “Banking identity card” that will be issued on February 28, 2018, which presents the overall picture of the account.(Further information is available at the Bank of Israel website.)
 Press release dated November 1, 2017.