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Banking (Customer Service) Law, 5741-1981

חוק הבנקאות (שירות ללקוח), תשמ"א-1981

Published: 1981-04-26Consolidated Hebrew text as of 2026-03-31 · Last amended 2026-07-22✓ Amendment status checked against the Knesset legislation record on 2026-09-28
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Unofficial English translation — for reference only. It may contain errors or omissions and cannot be relied on as a legal text. Only the Hebrew text published in Reshumot is legally binding.More

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Despite these checks, it may contain errors, omissions, or imprecise renderings of legal terminology and cross-references, and it may not yet reflect the latest amendments. It cannot be relied upon as a legal text.

The Hebrew text as published in Reshumot (ספר החוקים) and on the Knesset website is the sole authoritative and legally binding version. In any discrepancy, the Hebrew text prevails.

This translation is provided for informational purposes only and does not constitute legal advice. For use in legal proceedings, request a certified Expert Legal Opinion.

Chapter I: Interpretation

Definitions§

1.

In this Law –

"means of payment" – as defined in the Payment Services Law, 5779-2019;

"bank" – as its meaning in the Banking (Licensing) Law;

"bank with a minute scope of activity" – a bank whose asset value did not exceed a rate of 2.5% of the asset value of all banks in Israel, or such other rate as was determined pursuant to section 19a, or whose asset value did exceed such a rate in certain years but not for two consecutive years;

"bank with a small scope of activity" – a bank in which both of the following apply:

(1)its asset value did not exceed a rate of 5% of the asset value of all banks in Israel, or it did exceed such a rate in certain years but not for two consecutive years;
(2)its asset value exceeded, for two consecutive years, a rate of 2.5% of the asset value of all banks in Israel, or such other rate as was determined pursuant to section 19a;

"holder of a stable payment service provider licence" – a person who holds a stable payment service provider licence as defined in section 36i of the Banking (Licensing) Law;

"financial body" – any of the following:

(1)a banking corporation;
(2)the company as defined in the Postal Law, 5746-1986 (in this paragraph – the Postal Law), in its provision of the financial services as defined in that Law on behalf of the subsidiary as its meaning in section 88k of that Law, and from the determining date as its meaning pursuant to sections 56 and 57(c) of the Postal Law (Amendment No. 11), 5772-2012 – the subsidiary as defined in the Postal Law;
(3)an institutional body as defined in the Supervision of Financial Services (Insurance) Law, 5741-1981;
(4)a stock exchange member as its meaning in the Securities Law, 5728-1968;
(5)a licence holder under the Supervision of Financial Services (Regulated Financial Services) Law, 5776-2016;
(6)(Repealed);
(7)(Repealed);
(8)a portfolio manager as defined in the Regulation of Investment Advice, Investment Marketing and Investment Portfolio Management Law, 5755-1995;
(9)a fund manager as its meaning in section 4 of the Joint Investments in Trust Law, 5754-1994;
(9a)a payment company as defined in the Regulation of the Engagement in Payment Services and Payment Initiation Law, 5783-2023;
(10)another body that provides financial services, as determined by the Minister of Finance, with the consent of the Governor, by Order, with the approval of the Economics Committee of the Knesset;

"proper banking management directives" – directives of the Supervisor pursuant to section 5(c1) of the Banking Ordinance, 1941;

"issuance" and "operation of issuance", of a debit card – as defined in section 11b of the Banking (Licensing) Law, 5741-1981;

"Banking (Licensing) Law" – the Banking (Licensing) Law, 5741-1981;

"Debit Cards Law" – (Repealed);

"debit card" and "issuer" – as defined in section 11b of the Banking (Licensing) Law, 5741-1981;

"asset value" – the value of a bank's assets as it appears in the bank's balance sheet in the annual financial report prepared on a consolidated basis in accordance with the generally accepted accounting rules applicable to it, and if the bank is controlled by a bank – the asset value in the said financial report of the controlling bank;

"banking corporation" – as defined in the Banking (Licensing) Law, 5741-1981, including an auxiliary corporation, and a holder of a stable payment service provider licence and a corporation under its control; for this purpose, "control" – as defined in the Banking (Licensing) Law, and every term in the said definition shall be interpreted in accordance with the said Law;

"auxiliary corporation" – as defined in the Banking (Licensing) Law;

"service" – any service provided by a banking corporation;

"customer" – a person who receives a service from a banking corporation;

"the Governor" – the Governor of the Bank of Israel;

"the Supervisor" – the Supervisor of Banks appointed pursuant to section 5 of the Banking Ordinance, 1941;

"the Advisory Committee" – the Advisory Committee appointed pursuant to section 6 of the Banking Ordinance, 1941, together with a person appointed by the Minister of Finance as a representative of customers.

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Chapter II: Duties of a Banking Corporation in the Provision of Banking Services

Duty to Provide Certain Services§

2.
(a)A banking corporation shall not unreasonably refuse to provide services of the following types:
(1)acceptance of a monetary deposit in Israeli currency or in foreign currency;
(2)opening of a current account in Israeli currency and its management, for as long as any one of the following applies:
(a)the account has a credit balance in favour of the customer;
(b)the customer complies with the terms of the agreement between the customer and the banking corporation in connection with the management of the account;
(3)sale of bank cheques in Israeli currency and in foreign currency;
(4)(Repealed);

however, there is no obligation to provide a service that constitutes the granting of credit to a customer.

(b)Making unreasonable conditions for the provision of a service shall be treated as an unreasonable refusal to provide it.
(c)The Governor may, after consulting with the Advisory Committee and with the approval of the Minister of Finance, determine by Order that the provisions of this section shall apply to additional services.
(d)Without derogating from other means of proof regarding the reasonableness of a refusal as aforesaid, a banking corporation may notify the Supervisor of a business policy it has determined with respect to the provision of services, and if a notice of objection to the said policy has not been received from the Supervisor, a refusal arising from that policy shall be considered reasonable.
(e)If a banking corporation refused to provide the service listed in subsection (a)(2) to a financial body, for itself or for the customers of the financial body, or did not provide such a service within three months of the date of submission of the financial body's first application to open a current account in Israeli currency and to manage it at the banking corporation (in this subsection – delay in the provision of the service), the banking corporation shall give notice thereof to the Supervisor of Banks and shall state the reasons for its refusal to provide the service or for the cause of the delay in providing the service, as the case may be; the Supervisor may give instructions for the implementation of this subsection in proper banking management directives; in this subsection, "financial body" – any of the following:
(1)a licence holder under the Supervision of Financial Services (Regulated Financial Services) Law, 5776-2016;
(2)a payment company as defined in the Regulation of the Engagement in Payment Services and Payment Initiation Law, 5783-2023.
(f)The provisions of this section shall not apply to a bank with a minute scope of activity, a bank with a small scope of activity, or an auxiliary corporation controlled by any of them.

Provision of the Service of Opening and Managing a Current Account by a Bank with a Small Scope of Activity§

2a.

Where a bank with a small scope of activity or an auxiliary corporation under its control has offered the service of opening a current account and managing it as referred to in section 2(a)(2), it shall not unreasonably refuse to provide that same service to a particular customer; however, it may offer the said service only to certain types of customers; for this purpose, making unreasonable conditions for the provision of a service shall be treated as an unreasonable refusal to provide it.

Duty of Reasoning by a Bank with a Minute Scope of Activity§

2b.
(a)Where a bank with a minute scope of activity or an auxiliary corporation under its control has offered the service of opening a current account and managing it as referred to in section 2(a)(2), and refused a customer's application to provide that same service, it shall notify the customer thereof within a reasonable time; the notice shall set out the reasons for the refusal, unless setting out such reasons is liable to frustrate the purpose for which the refusal is required, including where such setting out is prohibited by law or where there was a reasonable apprehension that the customer is committing fraud.
(b)Subsection (a) shall not apply to a bank with a minute scope of activity or to an auxiliary corporation under its control, if five years have not yet elapsed from the day the bank became a licence holder.

Publication Regarding the Application of Sections 2a and 2b§

2c.

A bank or an auxiliary corporation as referred to in section 2a or section 2b shall publish on its website a notice regarding the application of the provisions of the said sections to it.

Prohibition of Misrepresentation§

3.

A banking corporation shall not do – by act or omission, in writing or orally or in any other manner – anything that is liable to mislead a customer in any matter that is material to the provision of a service to a customer (hereinafter – misrepresentation); without derogating from the generality of the aforesaid, the following matters shall be deemed material:

(1)the nature and quality of the service;
(2)the time of provision of the service;
(3)the return and benefit that can be derived from the service;
(4)the identity of the service provider;
(5)the sponsorship, encouragement or authorisation given for the provision of the service;
(6)the regular or customary price or the price previously charged for the service;
(7)a professional opinion given regarding the quality or nature of the service;
(8)the warranty conditions for the service;
(9)the period of provision of the service and the means of its renewal.

Prohibition of Harm in Special Circumstances§

4.

A banking corporation shall not do – by act or omission, in writing or orally or in any other manner – anything that constitutes exploitation of a customer's distress, intellectual or physical weakness, ignorance, lack of knowledge of the language or inexperience, or the exercise of undue influence over the customer, all in order to bind a transaction for the provision of a service on unreasonable terms or in order to give or receive consideration that differs to an unreasonable extent from the customary consideration.

Proper Disclosure§

5.
(a)The Governor may, after consulting with the Advisory Committee and with the approval of the Minister of Finance, prescribe in rules an obligation on banking corporations, in accordance with the particulars and manner prescribed therein –
(1)to disclose to their customers every material detail regarding the content, scope, terms and price of a service they provide and the risks involved therein;
(2)to state certain particulars in every publication of theirs regarding their services;
(3)to provide their customers, at fixed intervals, with reports on services provided to them and to state certain particulars therein;
(4)(Repealed).
(b)If the Governor had reasonable grounds to presume that it is required for the prevention of misrepresentation as referred to in section 3 or harm to a customer as referred to in section 4, the Governor may, after consulting with the Advisory Committee and with the approval of the Minister of Finance, require banking corporations by rules to conclude a written agreement with the customer, to state in the agreement the particulars prescribed in the rules and to deliver to the customer a signed copy of the agreement. The Governor may also prescribe in rules provisions regarding the lettering in the agreement, including provisions regarding the minimum size of the letters as aforesaid, the ratio between them and the space in which the information is contained and the manner of their writing and presentation, as well as a list of material terms in the agreement, their highlighting and the manner of their formulation, including the obligation to attach a separate document in respect thereof.
(b1)The Supervisor may determine, on considerations relating to the encouragement of competition or the encouragement of innovation and experimentation in the banking system, at the request of a bank with a minute scope of activity, a bank with a small scope of activity or an auxiliary corporation controlled by any of them, that certain rules prescribed pursuant to subsections (a) or (b) shall not apply to it, or shall apply with such adaptations as the Supervisor shall determine or upon the expiry of a period to be determined by the Supervisor, provided that the Supervisor was satisfied that material information for the customer would be presented in an alternative and effective manner; a bank or auxiliary corporation as aforesaid shall publish on its website a notice of the Supervisor's determination pursuant to this subsection that shall include particulars regarding the rules that were determined not to apply to the bank or the auxiliary corporation, as well as the adaptations and the period determined for the application of the determination, if determined in respect of it.
(c)A banking corporation shall not publish an advertisement even if it is an advertisement permitted under law, and shall not adopt another marketing method, that encourage a customer to take a loan, unless they include the name of the lender and are accompanied by a warning in the following terms: "Failure to repay the loan may result in a charge of default interest and enforcement proceedings".

Provision of Information on Fees and Interest Rates§

5a.
(a)Without derogating from the provisions of section 5, a banking corporation shall provide its customers with written information on the amounts of fees and interest rates, or on the rates thereof, that it charges for each service it provided to the customer; the information shall be provided in accordance with the provisions of subsections (b) to (e).
(b)Information as referred to in subsection (a) regarding fees, that does not relate to a particular customer, shall be displayed in a prominent and visible place at all branches of the banking corporation.
(c)
(1)Every six months a banking corporation that is not a bank shall send to every customer from whom fees were charged during the preceding six months a notice containing consolidated information and a summary of all fee amounts charged from the customer; the Governor shall prescribe rules regarding the form of such a notice sent to a customer who is a senior citizen as defined in the Senior Citizens Law, 5750-1989, including regarding the minimum size of the letters in that notice;
(2)where a customer received a notice pursuant to paragraph (1) by means of a computer, the banking corporation shall be exempt from the obligation to send it to the customer.
(d)At the beginning of each calendar month a bank shall send to every customer a notice that shall include the following particulars:
(1)the total amount of fees charged by the bank from the customer in the month preceding the date of sending the notice as aforesaid, not including the amount of fees charged in respect of a housing loan as defined in section 9b (in this subsection – a housing loan);
(2)the total amount of interest charged by the bank from the customer in the month preceding the date of sending the notice as aforesaid, not including the amount of interest charged in respect of a housing loan;
(3)the total amount of interest and fees charged by the bank from the customer in the month preceding the date of sending the notice as aforesaid in respect of a housing loan;
(4)notification of the customer of the customer's right to apply to the bank to receive details regarding the fees and interest set out in paragraphs (1) to (3).
(e)A notice as referred to in subsection (d) shall be sent to the customer in writing in a manner that enables immediate and accessible communication, as far as possible; the Supervisor shall prescribe provisions regarding the manner of delivering the said notice to the customer.
(f)(Repealed).

Notice to a Customer of the Taking of Action in respect of a Loan§

5a1.
(a)A banking corporation shall not call a loan for immediate repayment and shall not institute legal proceedings against a customer on account of non-compliance with the terms of a loan, including on account of non-repayment thereof, in whole or in part (in this section – action in respect of a loan), unless it has delivered to the customer written notice thereof at least 21 business days before the performance of the action in respect of a loan, in the manner in which it customarily delivers notices to that customer and also by personal delivery to the customer's address as registered with it; in this section, "loan" – excluding withdrawals of funds by a customer from a current account or by means of a means of payment, within a maximum amount that a banking corporation has agreed to honour in advance.
(b)A notice as referred to in subsection (a) shall include the following particulars:
(1)the outstanding balance of the loan;
(2)the rate of interest on the loan;
(3)the amount of the loan in arrears, the manner of its calculation and the rate of default interest, if any;
(4)the amount of the fee for calling the loan for immediate repayment, if any;
(5)(Repealed).
(c)Non-receipt of a notice as referred to in this section by a customer shall not prevent a banking corporation from performing an action in respect of a loan, provided that it delivered the notice in accordance with the provisions of this section.
(d)Notwithstanding the provisions of subsection (a), a banking corporation is not required to deliver a notice as referred to in that subsection if there is a real concern that its delivery would harm the banking corporation's collection capacity on account of any of the following:
(1)a deterioration in the customer's repayment capacity;
(2)other circumstances requiring the immediate performance of an action in respect of a loan.
(e)The provisions of this section shall not apply to a loan to which section 7 of the Fair Credit Law, 5753-1993, applies.

Notice of the End of a Banking Benefit or of the End of a Period in a Graduated Banking Benefit§

5a1a.
(a)In this section –

"banking benefit" – a benefit given by a banking corporation to a customer, in accordance with the engagement between them, regarding the rate of interest or a fee or the amount of a fee, for a period exceeding three months;

"graduated banking benefit" – a banking benefit whereby, pursuant to the engagement between the parties, during the overall benefit period, changes to the benefit terms shall apply at different times, all as detailed in the said engagement.

(b)A banking corporation shall deliver to a customer a notice of the end of the period of a banking benefit or of the end of a period prescribed in a graduated banking benefit given to the customer, no later than 21 days before the date of the said end as specified in the terms of the engagement between the parties; with respect to a benefit in debit card fees, the banking corporation shall state in that notice the means by which the customer may terminate the engagement in respect of the debit card; the provisions of this subsection shall also apply if upon the end of the period of the banking benefit the banking corporation gave the customer the same banking benefit for an additional period, on different terms, including at different rates.
(c)
(1)A notice as referred to in subsection (b) shall be delivered to the customer in writing, in a manner that enables immediate and accessible communication as far as possible, unless the customer has requested not to receive notices in this manner;
(2)in addition to the provisions of paragraph (1), a notice as referred to in subsection (b) shall be delivered in the manner in which the banking corporation delivers notices to that customer as agreed between them;
(3)notwithstanding the provisions of paragraphs (1) and (2), in cases where it is known to the banking corporation that the customer is unable to receive a written notice, an oral notice shall be delivered to the customer as an alternative to a written notice, in accordance with the provisions pursuant to paragraph (4);
(4)if the Supervisor considers it required, the Supervisor may prescribe, in proper banking management directives, provisions regarding the delivery of notices as referred to in this subsection.

Amendment or Termination of a Non-Banking Benefits Programme§

5a2.
(a)In this section –

"trader" – a person who sells an asset or provides a service in the course of business, including a manufacturer;

"amendment" – a reduction in the benefits or rights granted to a customer under a benefits programme, in their value, in the possibility of redeeming them, or in the period during which they may be redeemed;

"the programme", "benefits programme" – an ongoing engagement between a customer and an issuer, in which the customer provides personal details for the purpose of joining a programme of the type of a customer club operated by the issuer, the essence of which is the receipt of benefits that are not banking benefits, or the accumulation of rights, from the issuer or from a trader, whether joining the programme involves payment or not; for this purpose, "banking benefits" – benefits relating to the rate of interest or of a commission or to the amount of a commission;

"programme terms" – the terms of the benefits programme that were set at the time of engagement between the issuer operating the programme and the customer, or at a later time.

(b)Where an issuer operating a benefits programme for an indefinite period wishes to make an amendment to the programme or to terminate it –
(1)the issuer shall send the customer a notice of the details of the amendment or of the date of termination of the programme, between three and four months before the date on which the amendment comes into effect or the date of termination of the programme, as the case may be;
(2)the issuer shall enable the customer to redeem the benefits in accordance with the programme terms, commencing on the date of dispatch of the notice referred to in paragraph (1) and until at least the date on which the amendment comes into effect or the date of termination of the programme, as the case may be.
(c)Notwithstanding the provisions of subsection (b), where the issuer wishes to make an amendment to the programme referred to in that subsection that includes the accumulation of rights, or to terminate such a programme –
(1)the issuer shall send the customer a notice of the details of the amendment or of the date of termination of the programme, between eight and nine months before the date on which the amendment comes into effect or the date of termination of the programme, as the case may be; in such a notice the issuer shall also state the customer's right to redeem the rights accumulated by the customer pursuant to the provisions of paragraph (2);
(2)the issuer shall enable the customer to redeem the rights accumulated by the customer in accordance with the programme terms, commencing on the date of dispatch of the notice referred to in paragraph (1) and until at least the date on which the amendment comes into effect or the date of termination of the programme, as the case may be.
(d)An issuer operating a benefits programme for a fixed period shall not make an amendment to the programme and shall not terminate the programme before the expiry of the fixed period; such an issuer shall send the customer a notice, between three and four months before the expiry of the fixed period, regarding the expiry of the period and regarding the customer's right to redeem the benefits or rights under the benefits programme until the expiry of the period.
(e)Notices referred to in subsections (b)(1), (c)(1) and (d) shall be delivered to the customer in writing in the manner in which the issuer delivers notices to that customer as agreed between them and in accordance with the directives set by the Supervisor regarding the delivery of notices; however, in cases where the issuer is aware that the customer is unable to receive a written notice, a voice notice shall be delivered to the customer as an alternative to a written notice, as referred to in those directives.
(f)The Governor, with the approval of the Economics Committee of the Knesset, may prescribe –
(1)circumstances in which the obligation to deliver notices in accordance with the provisions of this section, in whole or in part, shall not apply, or shall apply with such modifications as the Governor shall prescribe;
(2)types of benefits programmes or of issuers to which the provisions of this section, in whole or in part, shall not apply or shall apply with such modifications as the Governor shall prescribe.
(g)The provisions of this section shall not apply to the following:
(1)an amendment to a benefits programme or termination of the programme, by reason of one of the following:
(a)a winding-up order, a provisional winding-up order, a receiving order, an assets receiving order or a stay of proceedings order under any law has been made against a trader who offers benefits or rights under the programme, and if the trader is an individual – a assets receiving order or a bankruptcy declaration order has been made against the trader under any law;
(b)the trader referred to in sub-paragraph (a) has ceased to exist or the trader's place of business has closed;
(2)a special sale that is not a benefit granted under a benefits programme; in this paragraph, "special sale" – an end-of-season sale, a full or partial clearance sale, a sale on the occasion of any event, a sale in which a benefit is offered to the customer in addition to the goods or services for which the customer paid, or any other sale in which the goods or services are offered by the issuer, in whole or in part, at reduced prices for a certain period, other than by way of granting a discount to a particular customer.

Professional Human Response§

5a3.
(a)A banking corporation that provides a telephone service that includes an automatic call-routing system shall provide a customer with a professional human response for at least the types of services listed below, after the option, if it exists, to select the language or the geographical area in which the telephone service is to be provided:
(1)handling a fault;
(2)account enquiry;
(3)termination of engagement.
(b)Notwithstanding the provisions of subsection (a), in a telephone service that includes a separate professional human response for services provided by a banking corporation, the banking corporation may allow the customer to select the type of service before the professional human response is provided.
(c)The waiting time to receive a professional human response in the types of services listed in subsection (a) shall not exceed six minutes from the commencement of the call, and the customer shall not be directed to a message-leaving service unless the customer has chosen to do so.
(d)
(1)Where the Supervisor has set directives regarding the waiting time to receive a professional human response, the Supervisor may direct that a banking corporation may deviate from the waiting time set in subsection (c), in the types of services listed in subsection (a), by a proportion of all referrals during a period set by the Supervisor, or during a time period set by the Supervisor, in advance or retrospectively;
(2)Where the Supervisor has directed as referred to in paragraph (1), the Supervisor shall report to the Economics Committee of the Knesset on the directives set, on the compliance of banking corporations with those directives, including the proportions of all referrals in which banking corporations complied, during the time period set for providing a professional human response, broken down by the types of services in respect of which they are obligated to provide a professional human response; such a report shall be delivered in the three years from the date of commencement of the directives – once every six months, and after that period – once a year, and shall be published on the Bank of Israel website.
(e)The provisions of this section shall not apply in the event of a general systemic fault in the provision of services by the banking corporation that does not permit compliance with the provisions of this section, and such a fault occurred in at least a regional spread, including in a particular locality, provided that upon such a referral for a professional human response, the banking corporation shall notify the customer, in a recorded message, of the area in which the fault exists and the estimated time for its repair.
(f)Nothing in the provisions of this section shall derogate from provisions set pursuant to law that require the provision of a professional human response in a period shorter than the period set in this section.

Notice to Customer of Credit Balance in Current Account§

5a4.
(a)Where a customer who is an individual (in this section – customer) has a credit balance in a current account in an amount exceeding NIS 15,000, for a consecutive period of at least one quarter, the banking corporation in which the account is held shall deliver to the customer a notice of the credit balance in the account; in the notice the banking corporation shall include a reference to information on investment alternatives that the customer may consider and that may yield a higher return; the Minister of Finance, with the consent of the Governor and with the approval of the Economics Committee of the Knesset, may, by Order, change the said amount.
(b)A notice referred to in subsection (a) shall be delivered at the beginning of each quarter; however, during a period of 18 months from the date of commencement of Amendment No. 39, such a notice shall be delivered at the beginning of each month, in respect of the preceding month; from the expiry of that period, the Governor, with the approval of the Economics Committee of the Knesset, may prescribe, by Order, that such a notice shall be sent at a higher frequency; in this subsection, "Amendment No. 39" – the Banking (Customer Service) Law (Amendment No. 39), 5785-2025.
(c)A notice referred to in subsection (a) shall be delivered to the customer in writing, in a manner that enables immediate and accessible communication as far as possible, unless the customer has requested not to receive notices in that manner, and shall also be delivered in the manner in which the banking corporation delivers notices to that customer as agreed between them; notwithstanding the foregoing, in cases where the banking corporation is aware that the customer is unable to receive a written notice, a voice notice shall be delivered to the customer as an alternative to a written notice, in accordance with the directives pursuant to subsection (d).
(d)Where the Supervisor considers it necessary, the Supervisor may prescribe, in proper banking management directives, provisions regarding a notice referred to in subsection (a), including provisions regarding the reference to information on investment alternatives referred to in that subsection, including information on investment alternatives with other financial bodies.

Transfer of a Customer between Banking Corporations§

5b.
(a)A customer who wishes to transfer the customer's accounts, including financial activity as defined in section 5b1(e), from one banking corporation (in this section – the original banking corporation) to another banking corporation (in this section – the absorbing banking corporation), or to close the account at the original banking corporation after the transfer of the accounts, may authorise, in writing, the absorbing banking corporation to manage on the customer's behalf all proceedings related to such a transfer, including to receive –
(1)the authorisations for debiting all the customer's accounts at the original banking corporation;
(2)assistance in the transfer of future charges by the customer's means of payment for settlement at the absorbing banking corporation.
(b)The Supervisor may give directives for the implementation of this section, in proper banking management directives.

Transfer of a Customer's Financial Activity between Banks§

5b1.
(a)In this section –

"bank" – a bank that offers customers services for the opening and management of a current account;

"bank with a small scope of activity" – (Repealed);

"online bank" – a bank that, according to its plan of action, provides service to its customers by online means, and does not maintain a branch network for receiving the public;

"customer" – an individual and also a corporation of a type that the Governor has prescribed in rules;

"the determining date" – the date of commencement of Chapter II of the Economic Programme Law (Legislative Amendments to Achieve Budget Targets for the 2019 Budget Year), 5778-2018;

"branch" – as defined in the Banking (Licensing) Law;

"financial activity" – services and products that a bank offers a customer, including types of future credits and types of future charges, that the Governor has prescribed in rules and on the conditions prescribed.

(b)Without derogating from the provisions of section 5b, where a customer has requested to transfer the customer's financial activity from the bank in which it is conducted to another bank (in this section – absorbing bank), the bank in which the customer's financial activity is conducted, including any bank in which it was previously conducted, on the determining date or thereafter, shall conduct that financial activity and from which it was transferred pursuant to the provisions of this section (in this section – the original bank), and the absorbing bank shall carry out the actions required to enable the customer to transfer the financial activity to the absorbing bank in an online, convenient, reliable and secure manner and without charging the customer for the process of transferring the financial activity as aforesaid, within seven business days from the date on which the original bank received notice of the approval of the customer's request by the absorbing bank, or within such other date as the Governor has prescribed with the consent of the Minister of Finance.
(c)The Governor shall prescribe in rules types of financial activity in respect of which the absorbing bank and the original bank shall carry out the actions referred to in subsection (b) also after the date referred to in that subsection and until the expiry of the period prescribed by the Governor, if prescribed, and the Governor may prescribe as aforesaid different periods for different types of financial activity.
(d)
(1)The Governor, with the consent of the Minister of Finance, shall prescribe in rules types of bank accounts to which the provisions of subsection (b) shall apply in respect of the financial activity conducted in them;
(2)If the Governor has not prescribed rules as referred to in paragraph (1) by the determining date, the provisions of subsection (b) shall apply to all types of bank accounts, unless the Governor, with the consent of the Minister of Finance, has prescribed in rules types of bank accounts to which the provisions of that subsection shall not apply in respect of the financial activity conducted in them.
(e)The Governor, with the consent of the Minister of Finance, may prescribe, on grounds relating to the cost involved in implementing the provisions of this section or to competition in the banking system, at the request of a bank with a small scope of activity, a bank with a minute scope of activity or an online bank, that the provisions of this section shall not apply to it, shall apply to it at the expiry of a period to be prescribed by the Governor, or that obligations shall apply to it only as an absorbing bank or as an original bank.
(f)Where a bank in respect of which the Governor, with the consent of the Minister of Finance, has prescribed as referred to in subsection (e), ceases to be a bank with a small scope of activity or a bank with a minute scope of activity, the provisions of this section shall apply to it at the date set out below, as the case may be, or at the expiry of such other period as the Governor has prescribed with the consent of the Minister of Finance:
(1)in respect of a bank in respect of which the Governor prescribed that the provisions of this section shall not apply – at the expiry of two years from the date on which it ceased to be a bank with a small scope of activity or a bank with a minute scope of activity;
(2)in respect of a bank in respect of which the Governor prescribed that the provisions of this section shall apply at the expiry of a period prescribed by the Governor – at the expiry of the period prescribed, or at the expiry of two years from the date on which it ceased to be a bank with a small scope of activity or a bank with a minute scope of activity, whichever is the earlier.
(f1)Without derogating from the provisions of subsection (e), the provisions of subsections (b) and (c) shall not apply to a bank if three years have not yet elapsed from the date on which it became a licence holder.
(g)The Supervisor may give directives to a banking corporation for the implementation of this section, in proper banking management directives.

Deposit of Funds in a Closed System – Portability of Deposits§

5b2.
(a)In this section –

"bank" and "bank with a small scope of activity" – (Repealed);

"postal bank" – as defined in the Regulation of the Engagement in Payment Services and Payment Initiation Law, 5783-2023;

"closed system account" – an account of an individual used for the holding and management of monetary deposits in a bank, the source of which is an account of that individual who is the holder of the deposit in another bank or in the postal bank, provided that the funds managed in it are returned only to the account from which they were transferred;

"customer" – a customer who is an individual.

(b)
(1)Without derogating from the provisions of section 2(a)(1), a bank that is not a bank with a small scope of activity or a bank with a minute scope of activity shall enable a customer to deposit funds in a monetary deposit in Israeli currency by means of a closed system account in a simple and convenient manner, and inter alia in an online manner; for this purpose, such a bank shall act in accordance with the Order prescribed by the Governor by virtue of the Governor's authority under section 7 of the Prohibition of Money Laundering Law, 5760-2000, in connection with a closed system account;
(2)The Supervisor may prescribe in proper banking management directives that the provisions of this section shall also apply to the deposit of funds in a monetary deposit in foreign currency by means of a closed system account.
(c)A customer may authorise in writing the bank in which the customer wishes to deposit funds by means of a closed system account, to manage on the customer's behalf all proceedings required for such a deposit.
(d)Without derogating from the provisions of section 4, a bank shall not do, by act or omission, in writing or orally or in any other manner, anything that amounts to exerting undue influence on a customer, in any matter connected with the deposit of funds by means of a closed system account in another bank.
(e)A bank referred to in subsection (b) shall publish information to the public about a service under this section, in the ways in which it customarily publishes information about the services it provides.
(f)Where a bank ceases to be a bank with a small scope of activity or a bank with a minute scope of activity, the provisions of subsections (b) and (e) shall apply to it at the expiry of six months from the date on which it ceased to be a bank with a small scope of activity or a bank with a minute scope of activity; however, the Supervisor may, at the request of a particular such bank, set a different period from the period referred to in this subsection.

Issuance of Cheque Forms§

5c.
(a)In this section –

"customer" – an individual who is not a corporation;

"cheque", "crossing" – as their meaning in sections 73 and 76 of the Bills of Exchange Ordinance, respectively.

(b)In cheque forms that a banking corporation issues to its customer, the cheques shall be crossed and shall have printed on them words prohibiting their transfer, unless the customer has requested that cheque forms be issued without the crossing and the words referred to.

Liability for Misrepresentation§

6.

Where there is misrepresentation in an advertisement of a banking corporation, the person on whose behalf the advertisement was made and the person who brought the matter to publication and thereby caused its publication shall be deemed to have made a misrepresentation, and if the publisher, the editor, the printer, the distributor or the person who actually decided on the publication of that advertisement knew that the advertisement was misleading, or if on its face the advertisement is misleading, those persons too shall be deemed to have made a misrepresentation.

Advertisement Directed at Minors§

6a.

The Governor may, after consulting the advisory committee, and with the approval of the Minister of Finance and the Economics Committee of the Knesset, prescribe in rules principles, rules and conditions for advertisements directed at minors, including a prohibition on advertisements that may mislead a minor or exploit the minor's age, innocence or lack of experience; such rules may relate to minors generally, or up to a certain age.

Conditioning of Service on Service§

7.
(a)A banking corporation shall not make the provision of a service conditional on the purchase of another service or an asset from it or from another person indicated by the corporation, unless there is a reasonable business connection between the service requested and the fulfilment of the condition.
(b)Without derogating from other means of proving the reasonableness of such a connection, a banking corporation may notify the Supervisor of a business policy it has set regarding the conditioning of the provision of a service on the purchase of another service or an asset as referred to in subsection (a), and if the Supervisor, after consulting the advisory committee, approves the said policy, a connection between a service requested and the fulfilment of the condition shall be deemed a reasonable connection if it derives from that policy.

Discounting Services in Debit Card Transactions§

7a.
(a)In this section –

"acquirer", "supplier" and "transaction" – as defined in section 11b of the Banking (Licensing) Law, 5741-1981;

"discounting services provider" – a person who provides discounting services in the course of business;

"discounting services" – the provision of credit to a supplier by advancing payment of proceeds due to the supplier from an acquirer in respect of transactions carried out by means of debit cards, in consideration of the assignment of the supplier's right to those proceeds, as well as the provision of credit to a supplier by advancing payment of proceeds as aforesaid, provided by the acquirer itself;

"terms of engagement" – including in respect of the type and scope of transactions or proceeds, price, payment conditions and payment dates, dates of debit and credit and the determination of commissions, including a commission for a minimum volume of transactions.

(b)An acquirer shall not discriminate, directly or indirectly, between discounting services providers, including between itself as a provider of such services and other discounting services providers, including in respect of the terms of engagement.
(c)An acquirer shall not refuse, for unreasonable grounds, to enable engagement between a discounting services provider and a supplier, including shall not refuse to engage itself with the discounting services provider; for this purpose –
(1)each of the following shall be regarded, inter alia, as a refusal for unreasonable grounds:
(a)a refusal to enable engagement between a discounting services provider and a supplier that is not given in writing with reasons within five business days, provided that the supplier's consent to the engagement was attached to the request to enable such engagement;
(b)a refusal to engage itself with a discounting services provider that is not given in writing with reasons within ten business days;
(c)a change to the terms of engagement established between an acquirer and a supplier, directly or indirectly, due to the supplier's engagement with a discounting services provider;
(d)additional circumstances determined by the Supervisor;
(2)an acquirer's refusal to enable engagement or to engage itself with a discounting services provider who does not hold a licence under the Supervision of Financial Services (Regulated Financial Services) Law, 5776-2016, even though a licensing obligation under that Law applies to it, shall be considered a refusal for reasonable grounds.
(d)An acquirer shall not make, directly or indirectly, the provision of acquiring services to a supplier or the establishment of particular terms of engagement with the supplier in respect of such services conditional upon the receipt of discounting services from it or from a particular discounting services provider.

Prohibition of Unreasonable Refusal to Engage an Acquirer with an Aggregator or to Prevent Engagement between an Aggregator and a Supplier§

7b.
(a)In this section –

"Regulation of Payment Services Law" – the Regulation of the Engagement in Payment Services and Payment Initiation Law, 5783-2023;

"aggregator" – a payment company as defined in the Regulation of Payment Services Law, or a holder of a stable payment service provider licence, which consolidates debits and credits of suppliers carried out by means of debit cards;

"large debit card acquirer" – as defined in the Regulation of Payment Services Law;

"supplier" – as defined in section 11b of the Banking (Licensing) Law, 5741-1981.

(b)A holder of a stable payment service provider licence who is a large debit card acquirer shall not refuse to engage with an aggregator and shall not prevent engagement between an aggregator and a supplier, for unreasonable grounds.
(c)For this purpose, each of the following shall be regarded, inter alia, as a refusal for unreasonable grounds:
(1)a refusal by a holder of a stable payment service provider licence who is a large debit card acquirer to engage with an aggregator that is not given in writing with reasons within 20 business days from the date on which the aggregator approached the holder;
(2)a refusal in other circumstances determined by the Minister of Finance, in consultation with the Governor and with the Securities Authority.
(d)A holder of a stable payment service provider licence who is a large debit card acquirer shall not collect from a supplier who has engaged with an aggregator consideration in addition to the consideration collected by the aggregator from the supplier for the service provided by the aggregator to the supplier.
(e)The Minister of Finance, in consultation with the Commissioner of Competition, may direct the consideration to be paid by an aggregator to a holder of a stable payment service provider licence who is a large debit card acquirer and the terms of engagement between them, where all of the following conditions are met:
(1)the aggregator approached a holder of a stable payment service provider licence who is a large debit card acquirer and within six months of the date of approach no agreement was reached between them as to the consideration or the terms of engagement;
(2)the Minister of Finance is satisfied that the holder of a stable payment service provider licence who is a large debit card acquirer demanded unreasonable consideration or terms of engagement.

Prohibition of Adverse Change to Terms of Engagement§

7c.

A banking corporation shall not adversely change the terms of an engagement contract with a customer solely because the customer has engaged or wishes to engage in an agreement to receive services from another financial body.

Prohibition of Prevention of Competition and Access to Information§

7d.
(a)A banking corporation shall not, by act or omission, prevent a financial body engaged in operating the issuance of debit cards issued by the banking corporation (in this section – an operating body) from providing financial services, including the provision of credit, to the banking corporation's customers, and shall not restrict an operating body in providing such services.
(b)Within the framework of the engagement contract between the banking corporation and the customer for whose benefit the debit card is issued, the following provisions shall apply:
(1)the banking corporation shall enable the operating body to request and obtain the customer's consent to use information about the customer that came into the operating body's possession in the course of carrying out the issuance or operating the issuance, for the purpose of providing financial services to the customer in respect of which the operating body is supervised;
(2)the banking corporation shall indicate to the customer the name of the operating body at the time of requesting the consent; where the customer has given consent as aforesaid, the operating body shall send the customer a written notice stating the fact of the customer's consent, the details of the information to be used, and the uses of that information permitted to that body, the customer's ability to withdraw or condition consent at any time, and the means of contact with the operating body in that regard;
(3)the banking corporation shall not, by act or omission, prevent the operating body from obtaining the customer's consent as aforesaid;
(4)the engagement contract with the customer for the issuance of the debit card shall not be made conditional upon the grant of consent as aforesaid to the operating body.
(c)Nothing in the provisions of this section shall derogate from the provisions of the Privacy Protection Law, 5741-1981, including in respect of obtaining the customer's consent to the transfer and use of information.
(d)The provisions of subsection (b) shall not apply in respect of an operating body that is not supervised under law in respect of its financial activity, or in respect of an operating body as aforesaid that does not engage in the operation of issuance in respect of the actions and material ancillary services to the issuance of a debit card.
7e.§

(Repealed — תיקון מס' 40, 2026)

Distribution of Credit Cards of Issuers Linked to a Banking Corporation by a Distribution Agreement§

7f.
(a)Where a customer approaches a banking corporation with a request to enter into a credit card contract with it, or where a banking corporation approaches a customer with a proposal to enter into such an engagement, the banking corporation shall distribute the credit cards of issuers linked to it by a distribution agreement; for this purpose –

"distribution", of credit cards – carrying out all of the following actions:

(1)presenting to the customer details regarding the issuers linked by a distribution agreement and regarding the credit cards they issue;
(2)transmitting the customer's details to a particular issuer linked by a distribution agreement, at the customer's request;
(3)delivering to the customer a credit card issued to the customer by an issuer linked by a distribution agreement, at the branches of the banking corporation, at the customer's request;

"distribution agreement" – an agreement between a banking corporation and another issuer for the distribution of the credit card issued by the other issuer;

"credit card", "credit card contract" – as defined in section 11b of the Banking (Licensing) Law, 5741-1981;

"issuer linked by a distribution agreement" – a financial body that is an issuer, excluding a body listed in paragraphs (4), (6), (7) and (10) of the definition of "financial body" in section 1, that is not supervised under law in respect of its financial activity as an issuer, which has entered into a distribution agreement with the banking corporation.

(b)The Supervisor shall issue, in proper banking management directives, directives regarding the terms of the distribution agreement between a banking corporation and an issuer linked by a distribution agreement, regarding the manner of distribution and regarding the details that the banking corporation shall be required to present to the customer, pursuant to this section.
(c)A banking corporation shall not unreasonably refuse to enter into a distribution agreement with an issuer as referred to in this section; for this purpose, the imposition of unreasonable conditions shall be treated as an unreasonable refusal; the Supervisor may determine in proper banking management directives conditions that shall be regarded as unreasonable for the purpose of this subsection.

Presentation of Information on Transactions Carried Out by a Customer by Means of a Debit Card§

7g.
(a)A banking corporation shall present to a customer, at the customer's request, information on transactions carried out by means of the customer's debit cards that was transmitted to it by the issuer of the debit card and in respect of which payment was made by way of debiting the customer's current account with the banking corporation; where the banking corporation is an issuer, the presentation of information pursuant to this subsection in respect of transactions carried out by means of debit cards issued by another issuer shall be identical to the presentation of information on transactions carried out by means of debit cards issued by the banking corporation.
(b)The Supervisor shall issue, in proper banking management directives, directives regarding the manner of presenting the information by a banking corporation pursuant to subsection (a), the dates of presenting the information and the details of the information.
(c)The Minister of Finance, with the consent of the Minister of Justice and in consultation with the Governor, shall prescribe in Regulations provisions regarding the transfer of information as referred to in subsection (a) from an issuer to a banking corporation for the purpose of its presentation as referred to in that subsection, including the details of the information, the dates of its transfer and the manner of transfer.
(d)A banking corporation shall not make any use of information that came into its possession pursuant to subsection (a), except for the purpose of presenting it as referred to in that subsection.

Prohibition of Unreasonable Refusal to an Additional Charge and Its Realisation§

7h.
(a)A banking corporation shall not unreasonably refuse a borrower's request for its consent to an additional charge (security interest) on an asset, subordinate in rank, in favour of another creditor.
(b)Where the borrower has charged an asset with an additional charge (security interest) in favour of another creditor, the other creditor may realise the charge (security interest) only with the consent of the banking corporation; the banking corporation shall not refuse to give its consent except for reasonable grounds.

Determination of Calculation Methods§

8.

The Governor may, after consulting the Advisory Committee and with the approval of the Minister of Finance, determine provisions regarding the dates on which credits and debits shall be posted to a monetary account of a customer maintained with a banking corporation, as well as the methods of calculating interest charged or paid by the banking corporation or the price it charges for services; the provisions may be general or by categories of banking corporations.

Limitation§

9.

The Governor may, after consulting the Advisory Committee and with the approval of the Minister of Finance, declare that a category of auxiliary corporations shall not be regarded as banking corporations for the purposes of this Law.

Cancellation of Charges§

9a.
(a)Where a customer has repaid, personally and not through a guarantor, all of the customer's obligations for the security of which charges (security interests) were created, the banking corporation shall cancel the charges (security interests) and, if the assets that were charged are in its possession, shall make them available to the customer or the pledgor within two weeks from the date of repayment; where the charge (security interest) is a mortgage or a registered pledge, the banking corporation shall submit, within 30 days from the date of repayment, a notice of cancellation of the charge (security interest) to the person with whom it is registered.
(b)The provisions of subsection (a) shall not apply for as long as all of the customer's obligations secured by those charges (security interests) have not been repaid; where the obligation that was repaid is of a revolving type, the charges (security interests) shall be cancelled only if the customer requested their cancellation, and the date on which the request reached the branch of the banking corporation where the customer's obligations were maintained shall be deemed the date of repayment for the purposes of the dates referred to in subsection (a).
(c)The costs of cancellation of the registration of a mortgage or pledge as aforesaid shall be borne by the banking corporation.

Restrictions Regarding the Collection of an Early Repayment Commission on a Housing Loan§

9a1.
(a)Notwithstanding the provisions of any law or agreement, at the time of realising a mortgage on a sole apartment used for residential purposes by an individual, or at the time of realising a pledge on rights in respect of a residential apartment as aforesaid, a banking corporation shall not collect an early repayment commission if the said mortgage or pledge were registered to secure a housing loan.
(b)Notwithstanding the provisions of subsection (a), a banking corporation may collect an early repayment commission if one of the following is met in respect of the consideration received for the sale of a residential apartment as referred to in subsection (a):
(1)the consideration exceeds NIS 2,500,000; this amount shall be linked to the index as referred to in section 9g;
(2)the consideration exceeds the full loan debt and does not exceed the amount in paragraph (1), provided that the amount of the early repayment commission shall not exceed the difference between the consideration and the full loan debt.
(c)The Governor, after consulting the Advisory Committee and with the approval of the Economics Committee of the Knesset, shall prescribe rules for the calculation of an early repayment commission pursuant to this section, and may also, in the manner aforesaid, change the amount specified in subsection (b)(1).
(d)In this section –

"sole apartment" – a residential apartment that is the sole apartment of an individual in Israel and in the Area, as defined in section 16a of the Real Property Taxation (Appreciation and Acquisition) Law, 5723-1963; for the purposes of this definition, a residential apartment shall be regarded as a sole apartment even if the individual owns, in addition thereto, a residential apartment that was leased for residential purposes under protected tenancy before the twenty-second day of Tevet 5757 (1 January 1997), or a residential apartment in which the individual's share is less than 25%;

"housing loan" – as defined in section 9b;

"individual" – a person who is not a corporation, provided that the person is an owner, long-term lessee or a person entitled to be registered in the real property registers as an owner or long-term lessee of the sole apartment, all within the meaning attributed to these terms in the Land Law, 5729-1969;

"full loan debt" – the amount of the loan for the security of whose repayment the mortgage or pledge were registered, including amounts added to the debt in respect of fees, professional fees, costs, interest and linkage up to the date of actual payment, if such amounts were added as determined pursuant to the Execution Law, 5727-1967.

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LawCorporate & Business

חוק הבנקאות (שירות ללקוח), תשמ"א-1981

Banking Customer Service Law

Banking Service Law

Chok Habankaot Sherut Lelakoach

Banking Law 5741

Customer Service Banking

Israeli Banking Customer Service

Banking Regulation Israel

Consumer Banking Law

Bank Customer Protection

Sheroot Lakoach Banking