The Bank of Israel lowers the fee for depositing an endorsed post-dated check for holding to a maximum of NIS 2, and calls on the public to deposit such checks
The Reducing the Use of Cash Law[1] sets out that a bank shall not pay out a check for which one or more of the restrictions enumerated in the Law apply. These restrictions apply to the banks beginning on July 1, 2019, and shall not apply to checks deposited for holding prior to the start date.
As such, there is concern that an endorsed check issued before the restrictions come into force for which one or more of the restrictions enumerated in the law exist, but which is deposited after the Law comes into effect, will not be honored, and that a person holding an endorsed post-dated check, who doesn't deposit the check for holding prior to that day, may have difficulties receiving the money since the check may be returned.
The Bank of Israel calls on individuals and small businesses to deposit such checks for holding at the banks before the restrictions come into effect, and thereby avoid the risk that the check will be returned if it does not meet the restrictions enumerated in the law.
In order to encourage the public to deposit such checks, the Governor of the Bank of Israel has set a reduced fee of up to NIS 2 (instead of NIS 12–15 at the various banks) for depositing an endorsed post-dated check, regardless of how it is deposited (at a teller or through a direct channel), for the period frm April 15, 2019 until the directives come into effect on June 30, 2019.
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Reduced fee for depositing a check for holding – up to NIS 2 – will apply when: |
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The check is endorsed[2] |
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The check is post-dated, or the customer requests to pay it out at a later date |
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The customer depositing the check is an individual or a small business[3] |
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The check will be deposited between April 15, 2019 and June 30, 2019 |
[1] The Reducing the Use of Cash Law is attached. The sections relating to checks are Sections 4 and 5 of the Law.
[2] An endorsed check is a tradable check transferred to another person, who is not a party to the initial transaction. It is clarified that a check upon which "to the beneficiary only" is printed is not tradable and cannot be endorsed, and the reduced fee for depositing a check for holding will not apply.
[3] A small business is a company that was incorporated less than one year ago or a business with annual turnover that does not exceed NIS 5 million (in accordance with the definition in the Banking (Service to the Customer)(Fees) Rules, 5768–2008.