As part of the new reform, the Supervisor of Banks has formulated a uniform and mandatory list of banking services for which the banking corporations are entitled to charge fees. The long list of banking services and the fees charged for them was examined in detail, which resulted in a new, smaller and far more transparent list.

The recommendations formulated by the Supervisor of Banks in the Bank of Israel for promoting competition in the banking system and for granting various powers for supervising the prices of banking services, were adopted by a parliamentary investigation committee that examined the issue in the first half of 2007. In the wake of the recommendations, the Banking Law (Customer Service) (Amendment 12), 2007 was passed, which grants powers to the Bank of Israel and the Supervisor of Banks to consider the fees charged by banking corporations. Based on the power granted by the law, a complete price list was drawn up, called the Banking Rules (Customer Service) (Fees), 2008, consisting of a uniform list of services for which the banking corporations are entitled to charge fees, as well as a basic price list of fees covering three major areas of consumer interest-current accounts, mortgages, and credit cards. In addition, rules were determined as to how the bank would inform customers about the fees and the price lists.

The major power is to determine a uniform and intelligible list of banking services for which the banking corporations are entitled to charge fees. The Supervisor of Banks is authorized to substantially reduce the number of fees. Furthermore, the Bank of Israel has the authority to intervene in the prices of banking services (on the grounds determined in the law), as well as to publish comparative data in order to encourage competition in the banking system.

The reform has been in force since July 1, 2008.

The reform aims to promote competition in the banking system by increasing transparency in the charging of fees. The assumption is that allowing customers to know how much they are paying for banking services and enabling them to compare the prices offered, will encourage them to negotiate for improving the conditions, and, if necessary, to move their account to the bank that offers them the best conditions. Intensifying competition will lead later in the process to improving the conditions offered to customers.

The reform will bring about four major changes:
ž	The number of fees for consumer services will be reduced by about two-thirds as a result of unifying and canceling fees.
ž	Henceforth, identical services will be called by the same name in all the banks.
ž	The method of calculating the fees will be identical in all the banks.
ž	Price lists for the standard fees (current account, mortgages and credit cards) will be available in a format that makes it easier for customers to check and compare them.

Prior to the reform the current account included 15 regular operations, for each of which a different fee was charged. After the reform only 2 fees will appear in the price lists for all current operations - a fee for operations in the direct channel (current account operations executed independently by the customer by means of the Internet, computerized answering service or ATMs) and a fee for operation by means of a teller. Note that operations such as making a deposit in an account or withdrawing money from the account, receipt and repayment of a loan, buying and selling securities - are not regarded as fees for operation by means of a teller, even if they are executed at a branch. In the wake of the reform, only two types of operation will appear in the current-account printout: operation in the direct channel and operation by means of a teller, and the two different fees that will be charged for these operations. Customers whose accounts are fairly inactive are likely to find themselves paying the minimum administrative fee that the bank determines in the price list.

Prior to the reform two fees were charged for credit facilities (in addition to interest)-a fee for compiling documents and a fee for credit allocation. As part of the reform, the fee for compiling documents will be cancelled, while only customers who did not make use of their credit facilities will be charged the credit allocation fee.

Prior to the reform two fees were charged for loans (in addition to the interest-rate of the loan) - a fee for compiling the credit documents and a loan collection fee. In the wake of the reform, the fee for compiling the loan documents (excluding housing loans) will be cancelled up to the sum of NIS 50,000, and the loan collection fee will be cancelled.

Prior to the reform, the cost of holding a credit card was covered by 3 fees - a monthly management fee, an annual fee for limitation of responsibility and an annual membership fee. In the wake of the reform, the credit-card companies will charge a single management fee, knows as a "monthly card fee". The fee will be collected monthly. Discounts and exemptions from payment of the fee will be given by the credit-card companies on a monthly basis, according to the criteria they have determined.

Even though the aim of reducing the number of fees was not, in itself, to lower the prices of banking services, the banks already expect losses in income from fees of millions of shekels as a result of the reform. These losses imply a saving for the customers. Furthermore, in the longer term, the increased awareness of the prices of banking services, in conjunction with consumers' willingness to compare and negotiate with the banks about the conditions they will receive, could lead to a reduction in prices of these services for private customers and small businesses.

The reform applies to any customer who is regarded as an "individual customer", as well as to corporations defined as "small businesses". Individual customer: An individual customer is any private customer, as opposed to a corporation (even if the customer is a licensed dealer). Small business: A "small business" is one of the following:
1.	Representatives of a jointly-owned residential building.
2.	A corporation that has been in existence for less than a year.
3.	A corporation that has submitted an annual report to the bank, according to which its business turnover in the year prior to submitting the report does not exceed one million NIS for the period of one year commencing from the month following the date on which it submitted the above report.
Excluded from this category are a corporation established by law, and a company all of whose shareholders are corporations that are not a "small business".

The complete price list is a uniform and intelligible list of the services for which the banks are entitled to charge fees as determined in The Banking Rules (Customer Service) (Fees), 2008 (in Hebrew). The complete price list of fees applies to any "individual" customer and to any corporation that is a "small business" whose scale of business does not exceed one million NIS a year. The banks must ensure that the complete price list is available for customers to study in their branches and on their website.

Banks offer many services. Most customers, however, use only a limited number of regular bank services. These limited services have been assembled in basic price lists dealing with three major subjects: current accounts, mortgages, and credit cards. The basic price lists are derived from the complete price list of fees. The basic price lists are available to customers at all the branches of a bank, on the bank's website, and from ATMs that the bank places at its customers' disposal. The customer can receive the basic price list from the banking corporation at the time of obtaining that particular service.

Some banks have informed the Supervisor of Banks that in general they will continue to grant benefits and discounts on fees to various customers and population groups such as soldiers and students, and will continue to honor specific agreements signed with their customers prior to the reform regarding discounts on fees.

The following fees have remained under price control even after the reform?

Name of Fee Comments / Fee Price of a regular check book This refers to the regular, familiar check book. The price of each check is limited to NIS 0.36. Information card This fee is charged when the customer receives from the bank, at his request, a card used only to extract information. This fee is limited to NIS 8 a year. Administrative fee for a housing loan This is a fee charged to borrowers who took a loan from the bank for purchasing a home. The fee is charged each month in conjunction with the current monthly payment for repaying the loan. This fee is limited to NIS 2 for each current payment for each home-purchasing loan. Agreement to create a lien with another bank (including an equal lien) This is a fee that the bank charges when a customer who has borrowed money from the bank against a lien on the asset, requests that the bank agree to another bank placing a lien on the same asset. The need for a lien with another bank arises, generally, when the customer is interested in taking out a further loan from another bank by having a lien placed on the asset, or when the customer is interested in replacing the loan he took from the bank with a cheaper loan from another bank. The fee is NIS 150. Transferring securities to the same customer's deposit account in another bank (including the customer's joint account with his or her spouse) These are cases in which the customer requests the transfer of securities from an account in one bank to an account in another bank. These cases also include transferring securities from an account registered in the name of a customer to a joint account in which the customer is only one of the partners. The maximum fee that can be charged for the service is NIS 5, plus the reimbursement of expenses incurred by the banking corporation toward a third party (e.g. the stock exchange or an overseas broker) for executing the service. Transferring foreign currency in Israel to the same customer's account This fee is charged for a bank transfer of foreign currency from the customer's account in one bank to his account in another bank.