From Wednesday, Israelis can change banks much more easily. A new system allows bank customers to switch from one bank to another online quickly and free of charge.
Under the new “follow me” service, bank accounts can be changed within seven days, and any fees or deposits reaching the old account will be automatically routed to the new account within two years of the change. In the current situation, all debits or credits for a closed account are returned, and it is the customer’s responsibility to arrange the transaction.
Users can request a transfer between banks through bank websites and at bank branches, the central bank said. Accounts with complex issues or legal holdings against them may not be eligible for the program.
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The system, which has been developed over more than three years, is part of a series of measures initiated by the Bank of Israel and the Ministry of Finance to strengthen competition in the financial system. While many Israelis say they are unhappy with their banking services, very few actually switch banks, due to the high costs and inconvenience involved.
View of the Bank Hapoalim branch in central Jerusalem on December 11, 2019 (photo credit: OLIVIER FITOUSSI / FLASH90)
“Completing this step is another step on the road to an open, transparent and more competitive financial system that we are promoting on several fronts and which will allow customers to easily and conveniently choose the providers of the different financial services they use” a said the Governor of the Bank of Israel, Professor Amir Yaron. “We will continue to use the digital age at our disposal to advance processes and reduce barriers in the financial system and in payment systems.”
“The swift transfer from one bank to another is an important step and is an integral part of the policy to strengthen competition that we have adopted in various industries,” added Finance Minister Avigdor Liberman. “We will continue to work to reduce bureaucracy in important focal points that make our day-to-day conduct easier. “
The new system will allow customers to easily move credit balances in shekels and foreign currencies, debit balances in shekels and foreign currencies, authorized debits from a current account, checks, securities (Israeli and foreign), credit card activities and standing orders. With regard to loans and mortgages, as well as savings accounts, special arrangements have been made, according to which the banks will deal with each case individually with their clients.
