The Bank of Israel views the promotion of competition in the banking system with great importance and has takes many steps to do so, including easing the switching of banks by customers. A major milestone in promoting competition was achieved today, with the publication of the Governor of the Bank of Israel’s Rules, with the consent of the Minister of Finance, and the publication for the banking system of conduct directives by the Supervisor of Banks (Proper Conduct of Banking Business Directives). This publication is the implementation of the legislation and the advance of the regulatory infrastructure for switching between banks online.


Supervisor of Banks Dr. Hedva Ber said, “We are aware that many customers are concerned about switching banks, and that those who do switch endure a lengthy and unfriendly process. For this reason, and in view of technological advances, we promoted, together with the Ministry of Finance, the project of online switching between banks. Customers who will be interested in doing so will be able to switch banks easily and rapidly, while contacting only the new bank, which will take care of whatever is necessary in this regard within 7 days. This is a project that is technologically complex for the banking system and therefore will go live in 2021, based on the rules that we are publishing today. This project will strengthen customers’ negotiating power vis-à-vis their bank, even if they choose to stay there.”


Main points of the process:

Currently, customers who wish to switch their banking activity to another bank at times encounter difficulties when completing the switching process, and it takes a long time. In view of these difficulties, and in the interest of making it as easy as possible for customers during the switching process, the Bank of Israel is promoting, together with the Ministry of Finance, the online switching of banks reform. This is a project that is complex technologically and with high cost for the banking system.


When the project is completed, in 2021, bank customers will be able to switch between banks online and easily, with the switching process bearing no cost for the customer and being completed within 7 business days. This reform will simplify the process of switching between banks, will enhance competition in the banking system, and will encourage innovation and increased efficiency at banks, for the benefit of the customers.


What accounts can be moved?

In accordance with the Governor’s Rules that were published today, it will be possible to switch banks online for about 80 percent of current accounts. The accounts that will not be possible to switch over automatically are accounts that have some complication or legal issue preventing it (such as trustee accounts, accounts whose owners are deceased, and custody accounts). In such cases the switching of activity between banks will be in accordance with the processes existing now. Likewise, it is possible that there will be cases in which the move cannot be executed, due to certain activity that exists in the old account. For example, it will not be possible to complete the switch if customers have a debt balance in the account they want to switch and that debt is not backed by sufficient pledges or that agreement about it has not been reached with the bank regarding its repayment.


Types of financial activity that will be switched over automatically:

  •    Credit balances in NIS and foreign currency
  •    Debit balances in NIS and foreign currency
  •    Authorized debits of a current account
  •    Standing orders (except for exceptional cases)
  •    Checks
  •    Negotiable securities
  •    Charges on a bank payment card
  •    Charges on a nonbank payment card



The guidelines that will be given to banks:

In addition to defining the accounts and activities that will be switched, conduct directives were also established and published today. The banks are to implement the directives within the framework of handling a customer’s request to switch activity to another bank. Among other things, directives were established regarding the full disclosure to be given to a customer throughout the process, the various stages of the process, the rules for maintaining the succession of the customer’s financial activity and directives for the routing period.

All this is with the goal of allowing an easy, clear, fair, and simple process for the customer.


The customer’s rights during the switching period:

  •    The customer can determine the transfer date of the activity in the account
  •    The customer can cancel the request to switch the activity (up to 1 day before the actual switch)
  •    The customer is entitled to the benefits and discounts at the old bank being maintained for at least 3 months from the date of the request (if the request to switch is delayed or cancelled) or up to the date of the actual transfer if it occurs earlier
  •    Any customer retention activity by the old bank is to be carried out fairly and without pressure
  •    The customer may switch several accounts into one account
  •    The customer can submit as many requests as he or she wants, without limit, unless there is a request for a process at the same time or within 3 months since the previous switch
  •    The new bank will serve as the address for all customer enquiries about the process
  •    The old bank as well is required to respond to customer enquiries related to activity that remains with it
  •    All information transferred will be subject to privacy laws