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Supervisor's announcment July 9th, 2014
Due to the continuation of the special home front situation, the Supervisor of Banks is expanding the easing measures granted to individuals and businesses operating in areas 0–40 kilometers from the Gaza Strip, even if their accounts are not held at a branch in that area, and is also implementing easing measures for soldiers called up to reserve duty. In addition, in regard to second quarter financial statements, the Supervisor of Banks has allowed banks not to set aside loan loss provisions according to level of arrears for household and small business loans.
The Supervisor of Banks, David Zaken, today provided an update that in light of the continuation of the special home front situation and in order to provide easing measures for additional customers, he is expanding the easing measures as follows:
1. Restrictions have been removed that derive from Supervisor of Banks directives related to deviation from the approved credit framework, customers’ joining the telephone instruction services and conducting Internet transactions, for individuals and for small businesses operating in the area 0–40 kilometers from the Gaza Strip, whose accounts are not held at branches in that area. Similar easing measures were also extended to soldiers serving reserve duty.
2. An instruction was given to banks to also avoid restricting accounts or account holders due to checks that were returned, when the account owner’s address listed with the banking corporation is in the area for which a special home front situation was declared.
3. Banks were instructed to act in accordance with the directives issued by the Minister of Justice, with the approval of the Knesset’s Constitution, Law, and Justice Committee, according to which checks that were returned, which were written by someone called up to reserve duty under emergency conditions or in a special situation, will be excluded from the number of checks with regard to restricting the account. The directives are expected to be published in Reshumot in the coming days. It is emphasized that in order to exclude a reservist’s checks, the reservist must provide the bank with documentation from military authorities that confirm that said customer served reserve duty and with a notation of the period served.
4. For second quarter financial statements, it is permitted not to record specific credit losses when the accumulated arrears for household and business loans rises above the set threshold. In this regard, banks have to use judgment in setting aside their loan loss provisions, in light of the consequences of the current situation. This instruction is intended to allow banks the appropriate flexibility with customers who have fallen into arrears due to the current special situation.
In addition to the expanded easing measures noted above, the Supervisor of Banks instructed the banking system to use judgment and to examine with the required sensitivity how to facilitate the population of customers who have been negatively impacted as a result of the emergency situation.