Transmenu powered by JoomlArt.com - Mambo Joomla Professional Templates Club

1. In this law -

"Banking corporation" - as defined in the Banking (Licensing) Law 1981, including a subsidiary corporation, within its meaning in that Law;

"Service" - any service performed by a banking corporation within the scope of its activity, as defined in Chapter Three of the Banking (Licensing) Law 1981;

"Customer" - a person who receives a service from a banking corporation;

"Governor" - the Governor of the Bank of Israel, appointed under Section 8 of the Bank of Israel Law 1954;

"Commissioner" - the Commissioner of Banks, appointed under Section 5 of the Banking Ordinance 1941;

"Advisory Committee" - the Advisory Committee appointed under Section 6 of the Banking Ordinance 1941, with an additional person appointed by the Minister of Finance as a representative of customers.

Definitions

2. (a) A banking corporation will not unreasonably refuse to give 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 from which money may be drawn on demand by check, and the keeping of such an account as long as the following applies:

(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 on keeping the account;

(3) the sale of bankers' checks in Israeli currency and in foreign currency;

(4) cancelled;

however, there is no obligation to perform a service that involves granting of credit to a customer.

(b) The attachment of unreasonable conditions to the performance of a service will be deemed as unreasonable refusal to perform it.

(c) The Governor may, after consultation with the Advisory Committee and with the approval of the Minister of Finance, prescribe by ordinance that the provisions of this section will apply to additional services.

(d) Without prejudice to other ways of proving the reasonableness of an aforesaid refusal, a banking corporation may inform the Commissioner of a business policy laid down by it on the performance of services, and if no notice is received from the Commissioner that he objects to the said policy, a refusal that arises out of the said policy will be deemed reasonable.

Duty to Perform Certain Services (Amended 1992, 1999)

3. A banking corporation will do nothing, whether by any act or by omission, in writing, orally or in any other manner, that is likely to mislead a customer on anything material to the performance of a service to him (hereinafter: misleading act). Without prejudice to the generality of the foregoing, the following is deemed material:

(1) the nature and quality of the service;

(2) the date of the service;

(3) the yield and benefit which can be derived from the service;

(4) the identity of the person performing the service;

(5) the sponsorship, encouragement and authorization given to the performance 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 ways of renewing it.

Prevention of Misleading

4. A banking corporation will do nothing,  whether by any act or omission, in writing, orally or in any other manner, that involves taking advantage of a customer's distress, his mental or physical weakness, his ignorance, his unfamiliarity with a language or his inexperience, or which involves 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.

Prevention of Harm Under Special Circumstances

5. (a) The Governor may, after consultation with the Advisory Committee and with the approval of the Minister of Finance, prescribe by rules that banking corporations will be obligated, in accordance with particulars and in a manner set out in those rules -

(1)  to disclose to their customers every material detail on the content, scope, conditions and price of a service performed by them and the risks involved therein;

(2) to indicate certain details in every advertisement of their services;

(3) to give their customers, on fixed dates, reports on services performed for them and indicate certain details therein ;

(b) When the Governor has reasonable grounds for believing that it is necessary to do so in order to prevent a misleading act, as said in Section 3, or to prevent harm to a customer, as said in Section 4, he may, after consultation with the Advisory Committee and with the approval of the Minister of Finance, require banking corporations by rules to make a written agreement with the customer, to specify in it the details prescribed in the rules and to deliver a signed copy of it to the customer .

Proper Disclosure (Amended 1995)

5A. (a) Without prejudice to the aforementioned in Section 5, a banking corporation will give his clients written information regarding the commissions amounts or the commission rates the banking corporation is charging for services the Governor has prescribed by rules according to Section 5 that the service is a material service (in this section: "A Material Service"); the information will be given to the customer according to the provision of Subsections (b) and (c).

(b) Information, as aforesaid in Subsection (a), that is not particular to a certain customer, will be presented to the customers at a visible place in all the branches of the banking corporation, and, if the banking corporation enables the customers to receive messages by computer services - the information will be sent to the customer via computer services.

(c) (1) At the end of each quarter a banking corporation will send each customer, from whom commissions were charged for performing material services during the quarter, a message containing a summary of all the commissions amounts charged from the customer for the aforesaid service.

(2) Should a customer receive such notification according to Subparagraph (1) via a computer, the banking corporation is no longer obliged to send the notification to the customer.

Giving Information on Commissions (Added 1998)

6. When the advertising of a banking corporation involves misleading information, 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 are deemed to have 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 obviously misleading, they will also be deemed to have committed the act.

Responsibility for Misleading

6A. The Governor may, after consultation with the Advisory Committee and with the approval of the Minister of Finance and the Economy Committee of the Knesset, prescribe by rules the principles, terms and conditions to publicize targeting minors, including a prohibition of a publication that may mislead a minor, exploit the minor's innocence or lack of experience; Such rules as aforesaid may apply to all minors, or to minors up to and including a certain age.

A Publication Targeting Minors (Added 1995)

7. (a) A banking corporation will not make the performance of a service conditional to the purchase of another service or of any commodity from it or from 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 ways of proving the reasonableness of a said link, a banking corporation may inform the Commissioner of a business policy laid down by it, by which performance of a service is made conditional to the purchase of another service or of a commodity, as aforesaid in Subsection (a), and if the Commissioner, after consultation with the Advisory Committee approves the policy, a link between the desired service and the fulfillment of an aforesaid condition will be deemed reasonable, if it arises out of that policy.

Making a Service Conditional to Purchasing Another Service

8. 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 are made in customers' accounts with a banking corporation, and on the ways of calculating the interest collected or paid by it or the price charged by it for its services. The provisions may be general or specific for particular categories of banking corporations.

Setting Methods of Calculation

9. The Governor may, after consultation with the Advisory Committee and with the approval of the Minister of Finance, declare that a particular category of subsidiary corporations is not deemed banking corporations for purposes of this law.

Restriction

9A. (a) A banking corporation will cancel all liens set to ensure the fulfillment of obligations, and transfer the assets held by it as collateral, should they be in its possession,  to the possession of the customer or guarantor within two weeks of the fulfillment of obligation, when a customer, himself and not by a guarantor, pays off  the said obligations; In case the lien is a mortgage or a registered lien, the banking corporation will send a notification of cancellation of lien to whomever registered the lien, within 30 days of the paying off of the said obligations; If the banking corporation is a mortgage bank, as defined in the Banking Law (Registration) 1981, it may submit the said notification within 60 days of the paying off of the said obligation.

(b) Subsection (a) will not apply to liens guarantying obligations not completely paid off by the customer; If the obligation paid for is a renewing obligation, the liens will be canceled only if the customer requested their cancellation, and the date on which the request was received by the banking corporation's branch in which the customer's obligation was managed, will be deemed as the day of paying off for the purpose of the aforesaid time periods of Subsection (a).

(c) The expenses of cancellation of mortgage or lien registration, as aforementioned, will be borne by the banking corporation.

Canceling Liens (Added 1994)

10. A banking corporation which does one of the following is liable to a fine of double the amount set in Section 61(a)(3) of the Penal Code 1977:

(l) infringed one of the provisions of Chapter Two or any Regulation, Instruction or Rule  issued under those provisions;

(2) infringed an undertaking given under Section 12(a).

Penalties (Amended 1994)

11. When an offense under Section 10 has been committed, the person who, at the time of its perpetration, was a general manager or active director of the corporation or a senior official thereof responsible for the field in question in the central management or in the branch concerned, will also be guilty thereof and be liable to imprisonment for a term of one year, unless he proves one of the following two occurred:

(1) the offence was committed without his knowledge and his position did not require him to know about it;

(2) after becoming aware that the corporation was about to commit the offense, he took all reasonable steps to prevent it from doing so.

Responsibility of a Manager

12. (a) When the Commissioner finds that a banking corporation has committed an offense under this law, he may, with the approval of the Attorney General or of his representative, agree to accept from it a written undertaking in all or one of the following matters:

(1) to refrain from an act or omission specified in the instrument of undertaking which, in the Commissioner's opinion, constitutes an offense under this law;

(2) to compensate the customer;

(3) to void the transaction by which the offense was committed;

(4) to publish a notice as the Commissioner may direct.

(b) When a banking corporation has given an undertaking as provided in this Section, no criminal proceedings will be instituted against it under this Law for the act or omission which was the ground for giving the undertaking and, subject to the Attorney General's decision, no such proceeding will be instituted against a manager, director or official, as aforesaid in Section 11.

(c) The acceptance of an undertaking under this section will not derogate from the right of a customer to claim compensation under Section 15.

Undertaking by a Banking Corporation

13. On application by the Attorney General, by his representative or by the Commissioner, the court may order the performance of any act required in order to prevent an offense under this law and the provision of security to ensure same, including the correction of a misleading publication.

Court Order to Prevent Offense

14. The court may order that a final judgment in a proceeding under this law, or an abstract thereof, or a correction of a misleading publication be published in a form and manner prescribed by it, and it may direct who bears the expense of publication. If the court directs that the accused bear the expense of publication, the expense will be treated as a fine imposed by the court.

Publication of Judgment or Correction of Publication

15. Damage caused to a person by an offense under the provisions of this Law or of any regulations made issued under this Law will be treated as damage for which compensation is claimable under the Tort Ordinance (New Version). For purposes of this section, it is immaterial -

(1) whether the damage was caused directly or indirectly;

(2) whether the damage consists of actual loss or of the non receipt of profits;

(3) whether the offender is prosecuted criminally, or not;

(4) that the offender did not intend to cause damage or could not have foreseen it.

Compensations

16. (a) The Commissioner will investigate complaints 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) Should the Commissioner find a complaint to be justified, he will so inform the complainant and the banking corporation concerned. His notification will set out the findings of his investigation and the manner in which the discovered defects should be corrected.

(c) When the Commissioner finds that a complaint is not justified or that it does not merit investigation by him, he will so inform the complainant. His notification may set out the findings of his investigation.

(d) The decisions and findings arrived at by the Commissioner in the investigation of a complaint -

(1) will not entitle the complainant or any other person with any right or relief in a court or tribunal, which he did not have previously;

(2) will not prevent the complainant or any other person from exercising any other right or from requesting any other relief to which he is entitled; however, if a time is prescribed therefore by any enactment, such time is not extended by the submission of a complaint to the Commissioner and by its investigation.

Complaints

16A. (a) Any person, the Israeli Consumer Council or any other consumer organization approved by the Minister of Justice according to Section 31 (c) of the Consumer Protection Law - 1981 (hereinafter: Plaintiff), may submit an action in favor of a group of people, for any cause of action he the plaintiff can submit an action on his own behalf and against any defendant that the plaintiff may sue on his own behalf.

(b) Where the cause of the class action, is a damage, it suffices that Plaintiff will show he suffered damages.

(c) A judgment in a class action will constitute a Res Judicata  for all members of the group, in accordance with the provisions of Section 16C(b).

Class Action (Added 1996)

16B. (a) Submission of a class action requires the approval of the Court, which will not approve same unless convinced that the following conditions exist:

(1) The size of the group justifies submitting a Class Action;

(2) There is a probable possibility that material questions of fact and law which are in common for the  group will be decided in a Class Action in favor of the group;

(3) The serving of the Class Action is preferable to serving individual claims, and is a justified and fair way to solve the conflict at hand;

(4) There is reasonable reason to assume that Plaintiff is representing the interest of all the members of the group in an appropriate manner.

(b) The court may take into consideration any damage that may be incurred by the defendant, the customers of the defendant and the general public, as a result of conducting the claim as a class action, as opposed to the benefit to the group and the general public from conducting the claim in the said manner.

Approval of Court (Added 1996)

16C. (a) Once the Court approves the claim as a Class Action, the Court will define the group in favor of which the Class Action is served, and decide the manner of the publication of the decision.

(b) All members of the said defined group will be deemed as agreeing to the conduct of the claim as a Class Action, unless such member will notify the Court of his objection to be deemed as a part of the group, within forty-five days of the publication of the Court's decision; The Court may, at a request of any person, extend the said period, if it saw a special reason to do so.

Definition of the Group (Added 1996)

16D. Plaintiff may not abandon a Class Action, nor may he settle nor reach a compromise with defendant, without the Courts approval.

Settlement or Compromise (Added 1996)

16E.(a) The Minister of Justice will enact procedural  regulations as to the manner of serving a class action and the managing of such, and he may regulate ways of hearing the position of the attorney - general and the Commissioner on the case.

(b) The Minister of Justice may regulate the ways of proving the damages caused to each member of a group.

Regulations (Added 1996)

16F. Plaintiff filing a class action will notify the Attorney - General and the Commissioner in writing.

Notification (Added 1996)

16G. The filing of a class action will be exempt form paying Court fees.

Exemption from Court Fees (Added 1996)

16H. The fees of a lawyer representing a Plaintiff in a class action will require the approval of the Court.

Lawyer's Fees (Added 1996)

16I. (a) A Court awarding monetary compensation in a class action may:

(1)  Order awards to be paid immediately or at a certain period determined by the Court;

(2) Order awards to be paid at periodical dates determined by the Court;

(3) Order that part of the awarded sums, after deduction of expenses and lawyer's fees, be paid to the Plaintiff who took upon himself the burden of filing the claim and proving it, and the balance will be divided amongst the remaining group members proportionately to the damages caused to them, or in any other manner as the Court may order.

(b) If the Court deems compensating all or part of the members of the group as impractical, whether as a result of not being able to identify the members of the group and awarding them the sums at a probable expense, or due to any other reason, the Court may order any other relief in favor of all or part of the group, or the general public, as the Court deems justified, according to the circumstances of the case.

Indemnity and Special Compensation (Added 1996)

16J. This section will not prohibit a Plaintiff under this law from pursuing any other relief against the defendant.

Non Prohibition of Other Relief (Added 1996)

17. The provisions of this law apply, notwithstanding any waiver or agreement to the contrary.

Overriding by This Law

17A. The provisions of this Law will apply to any guarantor of a customer's obligation to a banking corporation.

Application of This Law to Guarantor (Added 1994)

18. This Law adds to, and does not derogate from any other Law.

Saving of Laws

19. The Minister of Finance is charged with the implementation of this Law and he may, after consultation with the Governor, make regulations on any matter related to its implementation.

Implementation and Regulations

20. This law will come into effect on July 1, 1981.

Commencement

21. This law will be published within thirty days from the date of its adoption by the Knesset.

Publication

Menachem Begin   

Prime Minister

          Minister of Finance

          Yitzhak Navon

          President of the State