The government committee to shift the economy from cash to electronic spending is headed by Prime Minister’s Office Director-General Harel Locker. In line with the committee’s interim recommendations, the cabinet has decided to increase the maximum limit on cash transactions from 7,500 NIS to 10,000 NIS, at least for the immediate future. At a future stage in this new reality, the cash limit will be cut in half to 5,000 NIS.

Like other developed nations, Israel is working to clamp down on money laundering and tax evasion and one of the effective ways to accomplish this goal is by compelling transactions that leave a digital trail behind.

The committee is also examining bank charges, a bone of contention for many as Israelis feel banks are charging too many fees, too high a fee and they feel stricter regulations must be set into place by state agencies to restrict bank charges.

According to officials, Israel’s banking system returns 3.3 million checks annually for one reason or another. If a check is returned for insufficient funds, the person who lacks the funds will be charged 55 to 68 NIS. The person who deposited the check, who could not know if the check will be honored or not, will be charged 14 NIS in a large bank and as much as 20 NIS in a small bank.

If a check is returned for a technical reason such as lacking a signature, both parties will pay a fee as well. It is estimated the banks earn tens of millions of shekels annually with these fees alone.

Israel consumer council officials feel today’s situation is absurd, questioning why the person depositing a check returned for insufficient funds should be charged at all. The council is in the midst of submitting a formal request to Bank of Israel officials on this very matter, seeking to have this particular bank charge eliminated.

The consumer council is calling on the state to do a better job of regulating bank fees, which the council feels are exorbitant.

(YWN – Israel Desk, Jerusalem)