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Checks Without Cover – Emergency Leniencies

 

Due to the Swords of Iron war and the emergency situation in the economy, and based on cooperation between the Ministry of Justice and the Bank of Israel, and with the approval of the Knesset Constitution, Law and Justice Committee, on Thursday October 26, 2023, based on his authority pursuant to the Checks Without Cover Law, Justice Minister Yariv Levin set out regulations, according to which checks that are rejected due to insufficient coverage during October shall not be included in the list of checks that leads to the imposition of restrictions on the checking account on which they are drawn.

Accordingly, these checks will also be removed from the list of checks for sending a warning in respect of five checks without cover.  In addition, these leniencies shall apply to eligible population groups, such as residents of localities that have been attacked, those serving in the military reserves and their spouses, those who are missing, kidnapped, or being held prisoner and their families, victims of terrorist attacks and their families, and more—all as detailed in the regulations—for an additional month, until the end of November.

Those eligible for the leniencies as part of the regulations, which shall apply from November 1, 2023, or their family members, must being their situation to the attention of the bank.  If the bank is updated regarding the situation, including with regard to the customer’s address, the removal of checks from the list will be done automatically, and there is no need to contact the bank.

Questions and Answers

The Checks Without Cover (Reservations to the Application of the Law) Regulations, 5784–2023 set out that each check that is refused (returned due to insufficient cover) in the accounts of all customers from October 7, 2023 to October 31, 2023, will be removed from the count of refused checks for the purpose of imposing a restriction.  In addition, these checks will be removed from the list of checks for sending a warning in respect of five checks without cover.

 

These leniencies will continue to apply in November for those who are eligible who are enumerated in the regulations:

  1. The customer’s registered address (the up-to-date address in the Population Registry) or his address registered with the bank is in one of the localities included in the addendum to the Deferrals Law (Temporary Order – Swords of Iron) (Contract, Judicial Ruling or Payment to an Authority), 5784–2023;
  2. Missing, kidnapped, or held prisoner during the period or part thereof;
  3. Served in the military reserves during the period or part thereof;
  4. Was hospitalized for at least 7 days during the period due to belligerent attack;
  5. A relative of an eligible person enumerated in Sections b and d, a relative of someone who died as a result of a belligerent attack, or a spouse of someone serving in the military reserves.
  6. A small business (a company in which the number of shareholders does not exceed five), where one of the shareholders who owns at least 50 percent of the means of control is eligible based on Sections a-e.
  7. A registered partnership where an individual who participates in the management of the business and controls at least 50 percent of its assets is eligible based on Section a-e.

Customers whose address is in one of the localities defined in the law are automatically eligible for the leniency and do not need to contact the bank to ask that it be updated.

If you are included in a population group that is eligible for the leniency in accordance with the criteria set out in the regulations (see first question), and according to your examination the checks have not been automatically deleted by the bank, you must contact the bank where the account on which the checks are drawn is managed, and declare to them that you belong to an eligible group.

The leniencies that apply to the entire population relate to checks that were returned due to insufficient cover from October 7 until October 31, 2023.  The leniencies will continue for checks that were returned in November for the eligible population pursuant to the regulations (see previous question).  The right to delete checks from the list can be exercised even after the end of the leniency period.  In addition, the Bank of Israel is monitoring the effects of the emergency situation on the economy, and will take additional measures as necessary.

See the list in the Addendum to the Deferrals Law (Temporary Order – Swords of Iron) (Contract, Judicial Ruling or Payment to an Authority), 5784–2023.

Between November 1, 2023 and November 30, 2023, anyone included in one of the following groups is eligible:

 

  1. The customer’s address registered with the bank is in one of the localities included in the addendum to the Deferral Law (Temporary Order – Swords of Iron) (Contract, Judicial Ruling or Payment to an Authority), 5784–2023;
  2. Missing, kidnapped, or held prisoner during the period (October 7, 2023–November 30, 2023) or part thereof;
  3. Served in the military reserves under emergency circumstances or a special situation during the period (October 7, 2023–November 30, 2023) or part thereof, as well as his/her spouse;
  4. Was hospitalized for at least 7 days during the period (October 7, 2023–November 340, 2023) due to belligerent attack;
  5. A relative (spouse, sibling, parent, child) of an eligible person enumerated in Sections b and d, a relative of someone who died as a result of a belligerent attack.
  6. A small business (a company in which the number of shareholders does not exceed five), where one of the shareholders who owns at least 50 percent of the means of control is eligible based on Sections a-e.
  7. A registered partnership where an individual who participates in the management of the business and controls at least 50 percent of its assets is eligible based on Section a-e.

 

The Bank of Israel has a website that is available where you can check the status of your restriction and issue a status confirmation in the personal area for restricted customers and accounts (in Hebrew).

Reserve soldiers are included in the group of those eligible in November as well (see the first question in this list).  In order to take advantage of the right to delete checks as it appears in the regulation, you must declare to the bank where your account is managed (and to which the checks have been returned) that you are doing reserve duty.

If you have been restricted by the bank due to 10 checks without cover, and you believe that you have been blocked from preventing the restriction due to the emergency situation, you have the right to contact the Magistrates Court to seek leave to appeal in accordance with the causes listed in Section 10 of the Checks Without Cover Law, 5741–1981.

In addition, the Bank of Israel is monitoring the effects of the emergency situation on the economy, and will take additional measures as necessary.

If the restriction was imposed due to checks that were returned, and pursuant to the Checks Without Cover Regulations the customer is eligible for the deletion of checks with regard to restricting the account, so that their deletion will lower the number of bounced checks to below 10, the bank will be required to cancel the restriction and to report on this to the Restricted Checks system at the Bank of Israel.  Accordingly, the restriction will be deleted from the Central Credit Register as well.

The leniencies that were published in the regulations issued by the Minister of Justice relate to the deletion of checks that have been returned due to insufficient cover.  If the restriction was imposed by nonbank entities (Enforcement and Collections Agency, the Official Receiver, the Center for Collections and Fines), the authority to remove the restriction is theirs, and pursuant to the legislation relevant to that process.

In order to find out more information and request leniencies with regard to restrictions imposed by nonbank entities, please contact those entities directly according to the following contact details.

  1. Enforcement and Collections Agency: Please contact the Agency’s office in the district in which you reside. You can contact them via their website (in Hebrew), or by the following phone numbers: 03-610-4210 or 073-205-5000.
  2. Official Receiver: Please contact their office in the district in which you reside, via their website (in Hebrew), or by phone at the following numbers: Jerusalem: 02-621-5777; Be’er Sheva: 08-626-4575; Haifa: 04-863-3777; Tel Aviv-Jaffa: 03-689-9695.
  3. The Center for Collection of Fines, Fees, and Expenses: Please contact the Center according to the following contact details. Phone: 073-205-5000; Fax: 02-654-7799; Email: gviyamgk@eca.gov.il.

Deletion of a check from the number of checks with regard to the account restriction does not absolve the customer from other implications of a returned check, such as: the need to report to the Central Credit Register regarding a returned check, the beneficiary’s right to act to collect the check amount through the Enforcement and Collections Agency. 

If the warning was sent on the basis of checks that were returned and you are entitled pursuant to the Checks Without Cover Regulations to delete the checks with regard to the restriction on your account, such that their deletion will lower the number of checks that have been returned to below 5, the bank will be required to delete the record of the warning both in its records and in its report to the Credit Data Register.

Customers whose address registered with the bank or with the Population Registry is in one of the localities defined in the law are automatically eligible for the leniency, and there is no need to contact the bank to request that they be updated.  If the bank has not yet updated the eligibility automatically, or there was any kind of malfunction, you should contact the bank where the account in which the checks were returned is managed.  If the bank does not provide a sufficient response, you may contact the Banking Supervision Department’s Public Enquiries Unit.

If the reason for the negative indication is due to a restriction that was imposed on your account or the recording of a warning regarding five checks without cover, then if these are cancelled due to the leniency, the negative indication will be removed accordingly.

For more details, please contact the Credit Data Register call center at *6194 or via their website.

If you are included in the eligible group (see the first question), then in order to exercise your eligibility for checks to be deleted as set out in the regulations, you must declare this to the bank where the account in which the checks were returned is managed.

 

If the bank already knows that you are part of an eligible group, since you updated it in this regard due to other banking activity, the bank will delete the checks automatically.

It is sufficient for one of the partners in the account to be included as eligible for the leniencies, in order to lead to the deletion of checks in the account based on the terms stated in the regulations (see the first question).

This page was last updated on: 30/01/2024