1.6.2005
 
The Bank of Israel is Changing the Definition of a Banking Business Day in Israel
 
In the light of the growing practice of bank branches staying closed on Fridays, the Bank of Israel is changing the rules defining business days in banks in Israel, such that Fridays will continue to be defined as business days. Currently banking business days are defined as "days on which most bank branches operate and for which banking instruments are cleared." In order to avoid the situation in which Friday ceases to be a business day, the Bank of Israel will define a business day as "every day except for specified public holidays and rest days."
It is important to maintain a trading week of five business days. Canceling Friday as a business day would have an adverse effect on trade in foreign exchange on that day, and give an advantage to foreign banks and banks abroad. Moreover, Friday is a day when many customers deal with their banking business via the main branches, telephone service centers, internet, etc.
The Banking Supervision Department will issue the necessary directive that will stipulate the opening of a minimum number of branches on business days to ensure the existence of a proper minimum level of service on those days. Furthermore, the Supervisor of Banks will be authorized to determine that a particular day is not a banking business day in cases in which a significant share of customers are prevented from performing banking transactions in an orderly manner. This is clearly directed to exceptional and rare circumstances such as a security emergency or an extensive strike.
In addition, a change in the hours of a banking business day will be specified in a directive so that the business day will end at 18:30, Sunday to Thursday, and at 14:00 on Friday and holiday eves. At present every business day ends at 15:00. The end of a business day, currently and after the change, indicates the beginning of the following business day (except for Friday and holiday eves). This change is intended to increase the overlap between the banking business day and the day of banking corporations' activity, and to make it easier to carry out activity in various areas, such as vis-?-vis the stock exchange. This is made necessary by the reform in the payments systems in Israel which the Bank of Israel is initiating, and which is intended to lead to the adoption of the generally accepted international standards and the establishment of a Real Time Gross Settlement (RTGS) system that will operate until late.
The change in the definition of the business day will become effective immediately after completion of the process of consultation with the Advisory Committee and receipt of the approval of the Minister of Finance (as required by the Law in this case) The change in the hours of the business day will become effective on 21 February 2006.