Banking (Service to Customer) Law, 5741-1981

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BANKING (SERVICE TO CUSTOMER) LAW, 5741-1981*
Chapter A: Interpretation
1.Definitions
In this law -
“banking corporation” has the same meaning as in the Banking (Licensing) Law, 5741-1981, and includes an auxiliary corporation as defined in Section 1 of said Law, and "clearer" is as defined in Section 36i of that law; "service" means any service performed by a banking corporation within the scope of its activity as defined in chapter three of the Banking (Licensing) Law, 5741-1981; "customer" means a person who receives a service from a banking corporation; "the Governor" means the Governor of the Bank of Israel appointed under Section 8 of the Bank of Israel Law, 5714-1954; "the Supervisor" means the Supervisor of Banks appointed under Section 5 of the Banking Ordinance; "the Advisory Committee" means the Advisory Committee appointed under Section 6 of the Banking Ordinance, 1941, with the addition of a person appointed by the Minister of Finance as a representative of customers.
Chapter B: Duties of Banking Corporation in Providing Banking Services
2.Duty to provide certain services
(a) A banking corporation shall not unreasonably refuse to provide services within the following categories:
(1) the acceptance of money deposits in Israeli currency or in foreign currency; (2) the opening of a current account in Israeli currency and the keeping of such account so long as one of the following is the case:
a. the account shows a credit balance in favor of the customer; b. the customer abides by the conditions of the agreement between him and the banking corporation as to the keeping of the account; (3) the sale of banker's checks in Israeli currency and in foreign currency;

Sefer Hahukim of 5741, (26.4.1981) p. 258
Amendments: Sefer Hahukim 5752, p. 78; Sefer Hahukim 5754, p. 154; Sefer Hahukim 5755, p. 34, p. 158, p. 429; Sefer Hahukim 5756, p. 306, Sefer Hahukim 5758, p. 252, Sefer Hahukim 5759, p. 24, Sefer Hahukim 5764, p. 368, Sefer Hahukim 5765, p. 840, Sefer Hahukim 5766, p. 279, Sefer Hahukim 5767, p. 376, Sefer Hahukim 5771, p.1001, Sefer Hahukim 5771, p.1002, Sefer Hahukim 5772, p.86 and p. 388, Sefer Hahukim 5774 p.338.

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(4) (Repealed).
However, no obligation shall exist to provide a service involving the provision of credit to a customer. (b) The attachment of unreasonable conditions to the performance of any service shall be treated as refusal to give it. (c) The Governor may, after consultation with the Advisory Committee and with the approval of the Minister of Finance, prescribe by order that the provisions of this section shall apply to additional services. (d) Without prejudice to other modes of proving the reasonableness of a refusal as aforesaid, a banking corporation may inform the Supervisor of a business policy adopted by it as to the provision of services, and if the Supervisor does not notify the corporation that he opposes the said policy, a refusal arising out of that policy shall be regarded as reasonable. 3.Customer not to be misled A banking corporation shall do nothing—by an act or an omission, in writing, verbally or in any other manner—that is likely to mislead a customer as to anything material to the performance of a service to him (such an act or omission hereinafter referred to as "a misleading act"). Without prejudice to the generality of the foregoing, the following matters shall be regarded as material:
(1) the nature and quality of the service;
(2) the date of provision of the service;
(3) the yield and benefit which can be derived from the service; (4) the identity of the provider of the service; (5) the sponsorship, encouragement and authorization given to the provision of the service; (6) the ordinary or normal price of the service or the price charged for it in the past; (7) a professional opinion given in respect of the nature or quality of the service; (8) the conditions of responsibility for the service; (9) the duration of the service and the manner of renewing it. 4.Prevention of harm to customer under special circumstances A banking corporation shall do nothing—by an act or an omission, in writing, verbally or in any other manner—that involves taking advantage of the distress of a customer, his mental or physical weakness, his ignorance, his unfamiliarity with a language or his inexperience, or the exertion of undue influence on him, all in order to bring about a service transaction on unreasonable conditions or to give or receive a consideration unreasonably different from the normal consideration. 5.Proper disclosure (a) The Governor may, after consultation with the Advisory Committee and with the approval of the Minister of Finance, prescribe by rules that banking

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corporations shall, in accordance with such particulars and in such manner as set out in such rules - (1) disclose to their customers every material detail as to the content, scope, conditions and price of a service performed by them and the risks involved therein; (2) indicate certain details in every advertisement of their services; (3) give their customers, at fixed dates, reports on services performed for them and indicate certain details therein; (4) (Repealed). (b) Where the Governor has reasonable grounds to presume that it is necessary to do so to prevent a misleading act as referred to in Section 3 or harm to a customer as referred to in Section 4, he may, after consultation with the Advisory Committee and with the approval of the Minister of Finance, by rules require banking corporations to execute a written agreement with the customer, indicate therein the details prescribed in the rules and deliver a signed copy thereof to the customer. The Governor may also, establish in the rules, provisions regarding the letters of the agreement, including the minimum size of said letters, the proportion between them and the area in which the information is detailed and the manner of the letters' writing and presentation, as well as a list of substantive terms in the agreement, their prominence and phrasing, including the duty to attach a separate document in their regard. 5A. Providing Information about Fees (a) Without derogating from the provisions of Section 5, a banking corporation shall provide its customers with written information about the sum of fees or the rate of fees it charges for each service it has rendered to the customer; the information shall be provided as per Subsections (b) and (c). (b) Information as per Subsection (a), that does not refer to a specific customer, shall be presented in a prominent location in all of the banking corporation's branches. (c) (1) Every six months, a banking corporation shall send to each customer, who has been charged with fees in the preceding six months, a notice including condensed information and sum up of all fee sums he has been charged. The Governor shall establish, by rules, the format of said notice that is sent to a customer who is a senior citizen, as defined by the Senior Citizens Law, 5750-1989, including with regard to minimum size of the letters in said notice. (2) Where a customer receives a notice, as per Paragraph (1), by computer, the banking corporation shall be exempt from the duty to send it to the customer. 5A1. Notice to a Customer on Taking Action Regarding a Loan1

1
The date for Section 5A1 going into effect is September 9, 2014, and it applies as well to a loan provided by the banking corporation before said effective date.

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(a) A banking corporation shall not demand immediate repayment of a loan, nor take legal action against a customer for not meeting the terms of a loan, including nonpayment in part or in whole, (in this Section, action regarding a loan) unless it first submitted to the customer a written notice of such, at least 21 business days before taking the action regarding a loan, in a manner that it generally submits notices to said customer, as well as personal delivery to the address recorded for the customer. In this Section, “loan” – to exclude withdrawals of funds by the customer from a current account or by debit card as defined in the Debit Cards Law, 5746-1986, within the framework of the maximum amount that the banking corporation agreed in advance to honor. (b) Said notice referred to in Subsection (a) shall include the following particulars:
(1) Outstanding loan balance;
(2) Interest rate on loan;
(3) Amount of loan in arrears, the manner of its calculation, and the interest rate on the arrears, to the extent that there are any; (4) The amount of the fee for requiring immediate repayment of the loan, to the extent that there is any; (5) An explanation regarding the banking corporation’s obligation to transmit information regarding the customer in accordance with the provisions of
Section 16(a)(5) of the Credit Information Services Law, 5762-2002.
(c) Non-receipt of said notice, referred to in this Section, by the customer does not prevent the banking corporation from taking action regarding a loan, provided it sent said notice in accordance with the provisions of this section. (d) Notwithstanding the provisions of Subsection (a), a banking corporation is not required to submit such notice as discussed in that subsection, if such submission constitutes a real concern of a negative impact on the banking corporation’s collection ability due to one of the following:
(1) Change for the worse in the customer’s repayment ability; (2) Other conditions requiring immediate execution of action regarding a loan. 5B. Customer Switching Banking Corporations (a) A customer wishing to transfer his accounts from one banking corporation (in this Section – the original bank) to another (in this Section – the receiving bank), may authorize, in writing, the receiving bank to handle for him all procedures relating to said change, including receipt of – (1) The authorizations to debit all of the customer's accounts in the original bank; (2) Assistance in transferring future debits in the customer's debit card to the receiving bank for payment; in this Paragraph, "debit card" – as defined in the Debit Cards Law, 5746-1986.

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(b) The Supervisor may issue directives to implement this Section through Proper Conduct of Banking Business Directives under the Banking Ordinance, 1941. 5C. Issuing Check Forms (a) In this Section – "Customer" – an individual who is not a corporation; "Check", "Cross" – within their meaning in Sections 73 and 76 of the Bills of Exchange Ordinance, respectively. (b) On check forms that a banking corporation issues to its customer, the checks shall be crossed and a phrase prohibiting their negotiability shall be printed thereon, unless the customer asks that uncrossed check forms, without said phrase, be issued to him. 6.Responsibility for misleading act Where the advertising of a banking corporation involves a misleading act, the person in whose name the advertising is done and the person who delivered the material for publication and thereby caused it to be published shall be regarded as having committed the act, and if the publisher, editor, printer or distributor or the person who actually decided upon the publication knew that the advertising was misleading, or if the advertising is misleading on the face of it, they, too, shall be regarded as having misled. 6A. Advertising aimed at minors The Governor may prescribe in rules, after consultation with the Advisory Committee and with approval by the Minister of Finance and by the Knesset Economic Affairs Committee, principles, rules and conditions for advertising aimed at minors, including the prohibition of advertising that is liable to mislead minors, to exploit their age, naiveté or lack of experience; said rule may apply to minors in general, or up to a certain age. 7.Making service conditional upon purchase of other service (a) A banking corporation shall not make the provision of a service conditional upon the purchase of another service, or of any asset, from it or a person designated by it unless a reasonable business link exists between the desired service and the fulfillment of the condition. (b) Without prejudice to other modes of proving the reasonableness of a link as aforesaid, a banking corporation may inform the Supervisor of a business policy laid down by it as to making the giving of a service conditional on the purchase of another service, or any asset, as specified in Subsection (a), and if the Supervisor, after consultation with the Advisory Committee, approves the said policy, a link between a desired service and the fulfillment of a condition as aforesaid shall be regarded as reasonable if it arises out of that policy.

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7A. Discounting Services in Debit Card Transactions (a) In this Section – "Debit Card", "Clearer", "Supplier" and "Transaction" – as defined in Section 36i of the Banking (Licensing) Law, 5741-1981; "Discounting Services Provider" – a provider of discounting services in his normal course of business;" "Discounting Services" – providing credit to a supplier by way of advancing receipts he is owed by a clearer for transactions executed through debit cards, in exchange for the supplier's assigning his right for those receipts, as well as providing credit, by the clearer himself, to a supplier by way of advancing payment of said receipts; "Transaction Terms" – regarding as well the type and extent of the transactions or receipts, the price, payment terms and payment dates, credit and debit dates and establishing fees, including a fee for a minimum extent of transactions. (b) A clearer shall not discriminate, directly or indirectly, among discounting service providers, including between himself, as said service provider, and other discounting service providers, including with regard to the transaction terms. (c) A clearer shall not refuse to allow a transaction between a discounting service provider and a supplier, and he shall also not refuse to transact himself with the discounting service provider, on unreasonable grounds; in this regard – (1) Any of the following shall be deemed, among others, as a refusal on unreasonable grounds:
a. A refusal to allow a transaction between a discounting service provider and a supplier, unexplained in writing within five business days, provided the supplier's consent to the transaction was annexed to the request to enable it; b. A refusal to transact by himself with a discounting service provider, which is unexplained in writing within ten business days;
c. Amending the transaction terms set between a clearer and a supplier,
directly or indirectly, due to a transaction between the supplier and the discounting service provider; d. Other circumstances established by the Supervisor; (2) Refusal by a clearer to enable a transaction or to transact by himself with a discounting service provider that is not listed in the Currency Service Providers Registry under the Anti-Money Laundering Law, 5760-2000, even though a duty to register under the Law applies to the latter, shall be deemed a refusal on reasonable grounds. (d) A clearer shall not stipulate, directly or indirectly, provision of discounting services to a supplier, or establishing certain transaction terms with him regarding said services, against receiving discounting services from him or from a specified discounting service provider. 8.Determination of methods of calculation

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The Governor may, after consultation with the Advisory Committee and with the approval of the Minister of Finance, enact provisions as to the dates on which credit and debit entries shall be made in a customer's account with a banking corporation and the modes of calculating the interest collected or paid by it or the price charged by it for services. The provisions may be general or specific to particular categories of banking corporations. 9.Restriction The Governor may, after consultation with the Advisory Committee and with the approval of the Minister of Finance, declare that a particular category of auxiliary corporations shall not be regarded as banking corporations for the purposes of this Law. 9A. Cancellation of pledges (a) When a customer has paid, by himself and not through a guarantor, all his obligations, for the surety of which pledges had been created, the banking corporation shall cancel the pledges, and if the pledged assets are in its possession, it shall place them at the disposal of the customer or of the pledger within two weeks after the payment; if the pledge is a mortgage or a registered lien, the banking corporation shall, within 30 days after the payment, submit a notice of the cancellation of the pledge to the person with whom the pledge is registered; if the banking corporation is a mortgage bank, within its meaning in the Banking (Licensing) Law, 5741-1981, it may submit the said notice within 60 days from the date of the payment. (b) The provisions of Subsection (a) shall not apply, as long as all the customer's debits secured by those pledges have not been paid; if the paid debit was of the category of renewable debits, then the pledges shall only be cancelled if the customer requests their cancellation, and the date on which his request reached the banking corporation's branch, at which the debits are kept, shall, for purposes of the times said in Subsection (a), be deemed the date of payment. (c) The costs of canceling the registration of a mortgage or of a lien as aforesaid shall be borne by the banking corporation. 9A1. Limitations Regarding Collecting an Early Repayment Fee on a Housing Loan (a) Notwithstanding the provisions of any law or agreement, when executing a mortgage on a single home serving a dwelling for an individual, or when realizing a pledge on rights to a such a dwelling, a banking corporation shall not charge an early repayment fee if the said mortgage or pledge are recorded as collateral for a housing loan. (b) Notwithstanding the provisions of Subsection (a), a banking corporation may charge an early repayment fee if one of the following applies to the compensation received for selling the dwelling as said in Subsection (a):

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(1) The compensation is greater than 2.5 million New Shekels; this amount is to be indexed to the CPI as described in Section 9G; (2) The compensation is greater than the full loan amount and is not greater than the amount in Paragraph (1), provided that the amount of the early repayment fee is not greater than the difference between the compensation and the full loan amount. (c) The Governor, after consultation with the Advisory Committee and with the consent of the Economic Affairs Committee of the Knesset, shall set rules for calculating the early repayment fee in accordance with this section, and may also, in the way noted, change the amount recorded in Subsection (b)(1). (d) In this section- “Single home” – a dwelling that is the sole dwelling of an individual in Israel and in the area, as defined in Section 16a of the Property Taxation (Betterment and Purchase) Law, 5723-1963; with regard to this definition, a dwelling shall be considered a single home even if the individual has, in addition, a dwelling that was rented out as a rent-protected dwelling before January 1, 1997 (22 Tevet 5757), or a dwelling in which the individual’s share is less than 25 percent. “Housing loan” – as defined in Section 9B; “Individual” – one who is not a corporation, provided he is the owner, long￾term lessee, or one who is eligible to be listed in the Property Registries as the owner or long-term lessee of the single home, and all as per the understanding assigned to such terminology in the Properties Law, 5729-1969; “Full loan amount” – the amount of the loan for which, to guarantee its repayment, a mortgage or collateral were pledged, including amounts that were added to the loan due to fees, retainers, expenses, interest and indexation to the date of actual repayment, if such amounts were added as set by the Execution Office Law, 5727-1967.
Chapter B.1: Change in Repayment Dates of Housing Loans
9B. Definitions
In this Chapter -
"Housing loan" - each of the following:
(1) a loan given for the purpose of the acquisition of a dwelling; (2) a housing loan in the sense of this expression in the Housing Loans Law, 5752-1992; “Housing loan agreement” - an agreement concluded between a lending banking corporation and a borrower at the time the loan is given (in this Chapter—the Agreement); “Notice” - written notice to the customer;

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“Period for change of loan repayment date” - a four-month period starting on the date on which this Chapter goes into effect, and afterwards - a four-month period starting on April 1 every four years beginning in the year 2005. 9C. Change of date of monthly repayment of housing loan Notwithstanding the provisions of any law or agreement, a customer who has presented a written request during any period for change of loan repayment date may change the date of the monthly repayment of the housing loan that he has received to the first, the tenth, or the fifteenth of the month, at his discretion. 9D. Restriction concerning arrears in loan repayment If a customer is in arrears in repaying the housing loan, and as of the date of his request to change the monthly repayment date as stated in Section 9C has not yet cleared the full debt in arrears, or has not come to a settlement with the banking corporation, the banking corporation shall not be required to accede to the request. 9E. Notice from the banking corporation No later than thirty days before the beginning of each period for change in loan repayment date, a banking corporation shall notify the customer of the latter’s right to change the monthly repayment date of the housing loan under the terms established in this Law. The banking corporation may provide the customer with said notice within the framework of its notice to the customer about the annual breakdown of payments on account of the housing loan. 9F. Change in regard to part of the housing loans A customer may only change the monthly repayment date in regard to all parts of the housing loan. In this Section, the word “part” refers to any part of the housing loan to which terms other than those applying to other parts of the law apply, whether one agreement was signed in respect of all parts or whether more than one agreement was signed. 9G. Fees for changing housing loan repayment dates (a) For changing the monthly repayment date of a housing loan as stated in
Section 9C, the banking corporation may charge a fee at a rate that shall not
exceed one hundred twenty-five New Shekels.
(b) If a customer has taken several housing loans from one banking corporation and wishes to change the monthly repayment date of more than one of said loans, the banking corporation may charge a fee of fifty New Shekels for changing the repayment date of each additional loan, provided that the total fees that the banking corporation charges for changing the repayment dates of all said housing loans not exceed two hundred twenty-five New Shekels. (c) The banking corporation shall calculate the interest on account of the difference in the number of days between the original monthly repayment date of

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the loan and the new monthly repayment date (in this Subsection: the financial reckoning). The financial reckoning shall be performed at the rate of prime less one-quarter percentage point, at the average prime interest rate of the five largest banks, and the sum obtained from said reckoning shall be added to or subtracted from the sum that the customer shall pay the banking corporation. The Minister of Finance, per approval of the Economic Affairs Committee of the Knesset, may in regulations change the interest rate that is used for the financial reckoning performed under the provisions of this Subsection. (d) The sums at issue in this Section shall be adjusted on January 1 of each year commensurate with the rate of change in the new index relative to the base index. In this Subsection— "Index" - the Consumer Price Index published by the Central Bureau of Statistics; "New index" - the index most recently published before the adjustment date; "Base index" - the index most recently published before the previous adjustment date. 9H. Date of effect of change The new date for repayment of a loan shall go into effect on the repayment date starting on the month after the month in which the request is presented, provided that at least fourteen days lapse from the date on which the banking corporation is presented with the request for said change.
Chapter B.2: Supervision of Fees
9I. Full Fee Schedule and Condensed Fee Schedules (a) The Governor, upon consultation with the Advisory Committee, shall establish, by rules, a list of services for which a banking corporation may charge fees from its customers, and the method of calculation of said fees (in this
Chapter—the Full Fee Schedule); the Governor may determine types of services
not subject to this Subsection nor to Section 9j.
(b) The Governor may determine, by rules, condensed fee schedules out of the full list, regarding types of banking services or customers (in this Chapter— Condensed Fee Schedules). (c) A banking corporation shall inform its customers about the Full Fee
Schedule, the fees it charges for the services included therein, or their rate, and it
shall do likewise regarding the Condensed Fee Schedule to which it is subject, if so provided, and all shall be in a manner the Governor determines in the rules. (d) In promulgating the rules under this Section the Governor shall endeavor to present the fees fairly and clearly, so as to ensure the customers' ability to compare the cost of managing the account and means of payment, and he shall also pay attention, as far as possible, to the need to prevent the charging of different fees for the same service, unless he believes there are circumstances justifying such charge.

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(e) (1) A banking corporation wishing to add a service to the Full Fee Schedule shall submit a detailed application to the Supervisor in this regard; the Supervisor may require the applicant to submit additional details to examine the application. (2) The Supervisor shall reply to the application within 30 days as of its receipt or as of the day of receipt of the additional details, as the case may be. (3) The Supervisor may approve the application, he may set conditions for this approval, and he may reject it; where the Supervisor approves the application, the banking corporation may charge a fee for the service as of the date specified in the approval. (4) The Governor shall publish in Reshumot (the Official Gazette) a service approved pursuant to this subsection. (f) In this Section and in Section 9J, "a customer" – an individual, and also a Corporation which is a business, as set by the Governor in the rules in view of its capital turnover. 9J. Prohibition to Charge Fees Unspecified in the Fee Schedules A banking corporation shall charge its customers fees only for services specified in the Full Fee Schedule, in accordance with its provisions, or for services approved under
Section 9I(e); regarding types of customers set under Section 9I(b) – for services
specified in the Condensed Fee Schedule applicable to said customer type and in accordance with its provisions. 9K. Declaring a Service Subject to Supervision Regarding Fee Charged Therefor (a) The Governor may, for supervision of a fee a banking corporation charges its customers for a specified service, declare, by order, that service as subject to supervision regarding Sections 9L or 9M ( in this Chapter – service subject to supervision), if any of the following applies thereto:
(1) The fee charged therfor is liable to decrease competition among banking corporations, or between them and another entity providing a similar Service; (2) A customer may obtain it only at the banking corporation administering his account; (3) The Governor believes it to be a vital service, and it must be supervised due to public interest considerations. (b) The Governor, after consultation with the Advisory Committee and with the approval of the Economic Affairs Committee of the Knesset, may set causes in addition to those specified in Subsection (a); where the Governor sets said causes, they shall be subject to the initial part of Subsection (a). 9L. Supervising Fee Sums or their Rate The Governor may, after consulting the Advisory Committee, set, by order, regarding a service subject to supervision, any of the following:
(1) The amount of the fee to be charged therefor or its rate;

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(2) The maximum sum or rate of the fee to be charged therfor; (3) Prohibition to charge any fee therfor. 9M. Application to Increase a Fee Sum or Rate (a) A banking corporation requesting to charge its customers, for a service subject to supervision regarding which no provision has been set under Section 9l, a fee of a sum or rate surpassing the sum or rate it has charged for that service prior to the declaration under Section 9K, shall submit to the Supervisor a detailed application in this regard; the Supervisor may demand from the applicant additional details to examine the application. (b) The Supervisor may permit raising the sum or rate of a fee a banking corporation charges its customers for a service subject to supervision, regarding which an application under Subsection (a) has been submitted, either by the sum or rate requested under that subsection, or by a lower sum or rate, or deny the application; the Supervisor shall inform of his decision within 30 days as of receipt of the application or as of receipt of additional details, as the case may be. 9N. Prohibition of Charging Fees for Services Subject to Supervision Not Under Sections 9l or 9m A banking corporation shall not charge its customers a fee, for a service subject to supervision, which does not conform with a provision applicable to it in an order under
Section 9L, and neither shall it increase the sum or rate of a fee it charges for said
service, regarding which no provision was set in the order under that Section, unless this is under a permit according to Section 9M or under the terms of said permit. 9O. Reporting Obligation prior to Increasing a Fee for a Service Not under Supervision A banking corporation shall not increase the sum or rate of a fee for a service not under supervision, unless it so informs the Supervisor 30 days in advance. 9P. Publication of Approvals and Permits The Supervisor may direct a banking corporation to publish, in a manner he prescribes, an approval or permit granted under this Chapter. 9Q. Exclusiveness of Supervision Authority over Fees The Supervision over Commodities' and Services' Prices Law, 5756-1996 shall not apply to fees for services under this Law. 9R. Reporting Obligation to the Economic Affairs Committee of the Knesset The Supervisor shall report to the Economic Affairs Committee of the Knesset, every six months, about actions undertaken according to this Chapter, and about execution of said provisions by banking corporations.

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Chapter C: Penalties and other Sanctions
10. Penalties
A banking corporation which does one of the following is liable to double the fine set in
Section 61(a)(3) of the Penal Law, 5737-1977:
(1) infringes any of the provisions of Chapter B, excluding Sections 5, 5a, 5c, 7a and 8 or any regulation, direction or rule made or issued under such provisions; (2) infringes an undertaking given under section 12(a).
11. Responsibility of manager
When an offense under Section 10 is committed by a banking corporation, a person who, at the time of its commission, is a general manager or active director of the corporation or a senior employee responsible for the field in question in the senior management or in the branch concerned shall also be guilty thereof and be liable to imprisonment for a term of one year unless he proves one of the following:
(1) that it was committed without his knowledge and his position did not require him to know about it, or (2) that after becoming aware that the corporation was about to commit the offense he took all reasonable measures to prevent it from doing so. 11A. Financial sanction (a) If the Supervisor has reasonable grounds to assume that a banking corporation has not corrected a deficiency in accordance with Supervisor’s Directives given to under Section 16(b), he may impose on it a financial sanction in the sum of two hundred fifty thousand New Shekels. (b) If the Supervisor has reasonable grounds to assume that a banking corporation has committed one of the following actions, he may impose on it a financial sanction in the sum of seven hundred fifty thousand New Shekels. (1) violation of one of the provisions of Section 5A; (2) violation of one of the provisions of Section 9E, or demanding a charge in excess of the maximum sum established in Sections 9G(a) and (b), in contravention of the provisions of said Section. (3) Has charged a fee for a service not in the Full Fee Schedule or the Condensed Fee Schedule or not in accordance with the calculation set in the rules under Section 9i, in contravention of Section 9j; (4) Has increased the sum or rate of a fee for a service not subject to supervision, without reporting it to the Supervisor, in contravention of
Section 9O.
(c) If the Supervisor has reasonable grounds to assume that a banking corporation has committed one of the following actions, he may impose on it a financial sanction in the sum of one-and-a-half million New Shekels:
(1) violation of one of the provisions established in rules under Section 5;

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(2) violation of one of the provisions of Section 8; (3) Has not informed its customers about fee sums it charges for services in the Full Fee Schedule, in the manner set by the Governor under Section 9i(c); (4) Has not informed a customer of a type set under Section 9i(b), of a fee it charges for services in the Condensed Fee Schedule applicable to customers of that type, in the manner set by the Governor under Section 9i(c); (5) Has charged a fee for a service subject to supervision in disaccord with a provision under Section 9L, or, for the others, under Section 9M, in contravention of Section 9N. (d) The Supervisor may not impose a financial sanction that is smaller than that established in this Chapter except under the provisions of Subsection (e). (e) The Governor, in consultation with the Minister of Justice, may determine types of events, circumstances, and considerations, due to which the Supervisor may impose a financial sanction smaller than that established in Subsections (a)– (c), and at maximum rates of reduction that he shall determine. (f) The provisions of Sections 14j–o of the Banking Ordinance shall apply to financial sanctions under this Section, mutatis mutandis.
12. Undertaking by banking corporation
(a) Where the Supervisor considers that a banking corporation has committed an offense under this Law, he may, with the approval of the Attorney-General or his representative, agree to accept from it a written undertaking concerning one or more of the following:
(1) to refrain from an act or omission stated in the instrument of undertaking which, in the opinion of the Supervisor, constitutes an offense under this Law; (2) to compensate the customer; (3) to cancel the transaction in which the offense was committed; (4) to publish a notice as the Supervisor may direct. (b) Where a banking corporation has given an undertaking as provided in this section, no criminal proceedings shall be instituted against it under this Law for an act or omission which was the ground for giving the undertaking and, subject to the decision of the Attorney-General, no such proceedings shall be instituted against a manager, director or official as referred to in Section 11. (c) The acceptance of an undertaking under this section shall not derogate from the right of a customer to claim compensation under Section 15.
13. Court order to prevent offense
On the application of the Attorney-General or his representative or of the Supervisor, the court may order the doing of any act required to prevent an offense under this Law and the giving of security therefore, including the rectification of a misleading publication.

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Unofficial Translation

14. Publication of judgment or of rectification of a publication
    The court may order that a final judgment in a proceeding under this Law or an abstract thereof or a rectification of a misleading publication shall be published in such form and manner as it may prescribe, and it may direct who shall bear the expenses of publication; if the court directs that the accused shall bear the expenses of publication, they shall be treated as a fine imposed by the court.
15. Compensation
    Damage caused to a person by an offense under the provisions of this Law or any regulation made thereunder shall be treated as damage for which compensation is claimable under the Civil Wrongs Ordinance (New Version); for the purposes of this
    section, it shall be immaterial -
    (1) whether the damage is caused directly or indirectly; (2) whether the damage consists in actual loss or in prevention of profits; (3) whether the offender is criminally prosecuted or not; (4) that the offender did not intend to cause damage or could not have foreseen it.
16. Public Enquiries
    (a) The Supervisor shall investigate enquiries by members of the public concerning their business with banking corporations as far as they appear to him to be of some substance, and he shall exercise his powers under the Banking Ordinance, 1941, for this purpose. (b) If the Supervisor finds that the complaint is justified, he shall give notice to such effect to the complainant and to the banking corporation concerned: The Supervisor’s notice shall set out the findings of the investigation and the manner in which the defects that have been discovered shall be rectified. (c) If the Supervisor finds that the complaint is not justified or that it does not merit investigation by him, he shall give notice to such effect to the complainant:
    The notice may set out the findings of the clarification.
    (d) The decisions and findings arrived at by the Supervisor in investigating a complaint - (1) shall not grant the complainant or any other person any right or relief in a court or tribunal that he did not have previously; (2) shall not prevent the complainant or any other person from exercising any other right or requesting any other relief to which he is entitled; but if a time is prescribed therefore by any enactment, such time shall not be extended by the submission of a complaint to the Supervisor or its investigation.

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Unofficial Translation

Chapter C.1: Class Action Suit2
16a.- 16j. (Repealed).
Chapter D: Miscellaneous Provisions
16K. Publication of Data
The Supervisor may publish data regarding –
(1) The actual average expenditure of customers, or of types of customers, and of various banking corporations for services; a banking corporation shall submit to the Supervisor a report of said expenditure of its customers, in the format and at the time directed by the Supervisor; (2) Sums and rates of fees charged by banking corporations for types of services, in a manner enabling fee comparison.
17. Overriding effect of Law
The provisions of this Law shall apply notwithstanding any waiver or agreement to the contrary. 17A. Applicability of Law to guarantor The provisions of this Law shall also apply to a person who gave surety for a customer vis-à-vis a banking corporation. However, the provisions of Section 5A1 shall apply with regard to a guarantor for a customer vis-à-vis a banking corporation with adjustments and changes that are set in Proper Conduct of Banking Business Directives issued by the Supervisor under Section 5(c1) of the Banking Ordinance, 1941.
18. Maintaining laws
This Law shall add to, and not derogate from, any other law.
19. Implementation and regulations
The Minister of Finance is charged with the implementation of this Law and may, after consultation with the Governor, make regulations as to any matter relating to its implementation.
20. Commencement
This Law shall come into force on the 29th Sivan, 5741 (1st July, 1981).
21. Publication
This Law shall be published within thirty days from the date of its adoption by the Knesset.

2
The provisions of this chapter (16A–16J) were repealed in the Class Action Lawsuits Law, 5766-2006.

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Unofficial Translation

MENAHEM BEGIN YORAM ARIDOR
Prime Minister Minister of Finance
YITZCHAK NAVON
President of the State