The Bank of Israel has recently released a draft circular that outlines significant changes to certain bank fees. One of the most important changes is that banks must set a fixed fee for bank guarantees, instead of a percentage of the guarantee amount. Currently, the commission for a bank guarantee ranges from 2-2.5% of the amount, with a minimum of 250-350 shekels. Under the new rule, real estate tenants’ bank guarantees will have a lower commission rate compared to regular guarantees.
Another key change in the draft circular involves limiting banks’ ability to charge fees for early repayment of mortgages. Under the new rule, the fee will be a one-time charge for the entire mortgage, regardless of its structure or the number of loans within it. These changes are expected to take effect three months after final approval of the circular.
In addition, there will be a change in the commission scheme for managing portfolios of securities for clients with portfolios up to 400 thousand shekels. The commission will now be denominated in shekels rather than as a percentage of the portfolio size.
Overall, these changes aim to make banking fees more transparent and fair for consumers. The draft circular is open for public review and feedback before final approval.
