In recent weeks, the banking system has returned to full operation in view of the COVID-19 pandemic, as most restrictions have been cancelled and the economy has begun returning to regular economic activity.  However, in view of the high rate of unemployment and the negative impact to economic activity, many households and businesses continue to suffer from the ramifications of the corona crisis.  In view of this, the Supervisor of Banks today sent a letter to the banking system in which he clarifies how the banking corporations are to work in order to help customers that are encountering difficulties due to the crisis.

 

The Supervisor’s letter emphasizes that in accordance with existing Supervisory Directives, if a customer experiences financial difficulties and has trouble meeting his obligations toward the banking corporation, the banking corporation must try to exhaust all available avenues to collect all components of the debt before initiating legal proceedings, while maintaining fairness and transparency throughout the debt collection process.

 

This is even more the case in the current situation, and as such, the banking corporations are being asked to continue operating in this manner with even greater intensity than usual, with the aim of identifying difficulties and helping their customers get through this challenging period as quickly as possible, so that they can help prevent the escalation of debts and future deterioration of their customers’ situations.

 

Supervisor of Banks Yair Avidan: “The banking system is the nerve center of the country’s economic and social system.  As such, it must continue to stand at the side of its customers at this time, in order to help them as much as possible to get through the crisis, while demonstrating fairness, flexibility, and sensitivity.  The corona crisis has not yet run its course, and the banks must therefore continue investing efforts and resources in the early detection of difficulties among their customers, try to help them meet their obligations, and work with them to reach arrangements before initiating legal proceedings.”​

​​