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On April 1, 2014, the amendment to the Banking Regulations (Customer Service) (Fees), 5768–2008, requiring the banks to offer their customers a “basic track” and an “expanded track” as shelf products will come into effect.  In advance of this amendment coming into effect, and in order to set a single price for managing a current account within the framework of these tracks, the Bank of Israel announced its intention to impose price supervision on the basic track and to set its maximum price at NIS 10.
 
This intention was formulated in view of the fact that the price set by most of the banks for the basic track, and presented to the Banking Supervision Department, is higher than the average price actually charged for the basic current account management services, and could therefore have meant that the aim for which the tracks program was created would not be achieved.
 
The purpose of the tracks program is to improve the ability of the banks’ customers to compare prices, to increase price transparency, and at the end of the day, to encourage competition in the management of current accounts.  This measure comes in addition to a series of measures adopted by the Banking Supervision Department in recent years to increase competition and improve the state of banking customers.
 
Supervisor of Banks David Zaken said: “After we were presented with the pricing of the basic track at various banks, we reached the conclusion that it is not in line with the goal of the process, and we therefore decided to take an exceptional measure and to impose supervision on the basic track and determine its maximum price.  In regard to the expanded track, we call on the public to make use of the fact that from now, a simple and easy comparison can be made between the prices offered and an assessment can be made as to how worthwhile it is to join this track.”
 
From April 1, 2014, the banks are required to include two fee tracks as part of the services offered to their customers—the basic track and the expanded track—and to enable each customer to join them.  In addition, the banks will be able to offer their customers a premium (expanded-plus) track, but will not be required to do so.  Each track will include the actions that can be executed by the customer each month in exchange for a monthly price that is determined in advance.  This means that on condition that the customer does not exceed the allowed number of actions set for the track that he has joined, the price he will pay for the basic services included in managing the current account will be set and known in advance. 
 
The following is information on each of the three tracks:
 
  • The basic track: A track that includes up to one teller-executed activity and up to 10 customer-executed activities, and reflects the activity of a household with an average activity profile.  As stated, the Bank of Israel intends to impose supervision on the price of the basic track and to set its maximum price at NIS 10.
  • The expanded track: A track that includes up to 10 teller-executed activities and up to 50 customer-executed activities.  This track is mainly intended for customers who make above average use of these services.
  • The expanded-plus track: A track that includes the quantity of actions as in the expanded track, as well as additional services as decided upon by the banking corporation.  As part of this track, each bank can offer its customers services that are unique to it, which have added value for the customers.
 
The tracks method will create a situation in which bank customers will be able to select from among various tracks in accordance with the activity profile in their current account.
 
The tracks will be added to the existing fee schedule at each bank, and will not replace the fees contained therein, such that the pricing of the services for a customer who is not interested in joining one of the tracks will remain according to the existing pay as you go method.  In any case, each customer will be able to move from one charge method to another at the beginning of any calendar month, subject to providing advance notice.  The charge for the track will be made on a monthly basis, at the beginning of each month, for the month preceding it.
 
Appendix A—Common current account services that will be included in the tracks method
 
Teller-executed activity—Transactions conducted via a bank clerk, including through a manned telephone call center:
·         Depositing cash
·         Withdrawing cash
·         Producing and sending a printout at the customer’s request
·         Transferring or depositing into another account
·         Redeeming a check (including withdrawal through a self-addressed check)
·         Depositing a check (for each group of checks—up to 20 checks)
·         Payment of a bill
·         Making change for cash
 
Customer-executed activity—Current account transactions not conducted via a bank clerk:
·         Crediting an account through a clearinghouse
·         Charging via a credit card
·         Depositing cash
·         Withdrawing cash through an ATM
·         Transferring or depositing into another account
·         Payment of a bill
·         Request for information on any matter (from the seventh request per month)
·         Depositing a check (for each group of checks—up to 20 checks)
·         Charging based on an authorized debit or standing order