The Bank of Israel restricts banks in collecting early repayment fees (Photo by Rami Zerniger, Yossi Zellinger, Yitzhak Gadi Dagon, Yachatz-Avshalom Shashoni, Oren Dai)
The Bank of Israel today, through the Supervisor of Banks, Yair Avidan, submitted the analysis of bank fees to the Knesset’s Economics Committee. The data transmitted by the Supervisor of Banks to the Committee shows that a third of the commissions paid by households and small businesses to the banking system in the first half of 2021 was a commission related to securities trading.
In total, there has been a 45% decrease in the fee payments made by the public to banks since the reform was launched in 2008. The Supervisor of Banks attributes this decrease, among other things, to the cumulative complex of supervisory fees in recent years. The decline in the first half of 2021 continues this trend, but is also largely affected by the corona virus crisis which continued to give its signals in economic activity and households during this period.
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The majority of the amount paid by the public, individuals and small businesses, on banking fees derives from securities activity (33%), followed by fees for managing a checking account (19%), credit (16%) and debit cards (16%).
The average cost of running the current account and holding debit cards to the account in the first half of 2021 increased by about 6% compared to the average cost in 2020 and stands at NIS 23.8 per month, and decreased by 11.5% compared to the cost in 2019, before the corona period. About NIS 26.9.
This cost consists of: The cost of running the current account amounted to NIS 10.7, a decrease of about 5.5% compared to 2020, which is mainly due to a decrease of about 35% in the amount of actions to return a party due to “not enough coverage”. The trend of switching to digital operations, which also contributes to lowering the cost. In the last decade, the cost of running a current account has decreased by about 47%.
The cost of debit cards amounted to NIS 13.1, an increase of about 18% compared to 2020. The increase was mainly due to an increase in income from transaction fees and withdrawals in foreign currency, due to the return of the economy to a certain routine compared to the corresponding period last year when the corona crisis broke out.
The Supervisor of Banks, Yair Avidan, said: “I reiterate my call on the public to use direct channels and digital means and examine the feasibility of servicing the routes for them, thus saving costs. High service for them too.
I also call on the public to compare the quality and cost of services between the various banks, including making use of the “Bank ID” report that is expected to be presented to customers on the banks’ websites on 28 February. It is also worth noting that several months ago, the system was launched that allows customers to move easily and conveniently, which has been under supervision for a long time.
“The system is now available to customers and can help promote competition and the well-being of the banking consumer. In these days when the Corona virus crisis is still giving its signals, I call on the banking system to be more sensitive, especially to consumer issues that are at the heart of public sensitivity.”
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