Israeli Shortcut recently petitioned the Bank of Israel’s Supervisor of Banks seeking clarification regarding bank rules that discriminate against foreign citizens living in Israel who want to open bank accounts. Not only the Bank of Israel didn’t respond, we found that bank restrictions had become worse.
Israeli Shortcut has received dozens of inquiries in recent days showing that banks are unfairly burdening the population of foreign nationals and have reduced bank branches serving that population. Warnings were sent to long-time customers that their account will be closed unless they deposit $50,000.
Our first letter to the Bank of Israel Supervisor of Banks explained the extreme inconvenience caused this population by not letting them open a normal bank account to help them manage their home finances. We asked why this population doesn’t have the same reasonable conditions to opening a bank account like an ordinary Israeli citizen. We received this boilerplate response: "The subject of your letters concerns concrete problems in the area of bank - client relations. You should turn to the banks’ Office of the Ombudsman where the incident your complaint is about occurred.” This brush off amounts to a denial of the disgraceful reality.
We then wrote a letter detailing the banks’ restrictions and requested clarifications concerning them. Unfortunately, we received no response.
This letter detailed the Bank of Israel’s stipulations concerning providing banking services to the customer which states that if banks want to downsize branches due to transitioning to the Internet age, they still must ensure there are enough branches and they are easily accessible to the entire population. In practice, banks have discriminated against foreign nationals by radically downsizing the number of their branches and setting them up in remote locations, in contrast to branches for Israeli clients which are numerous and easily accessible, and many branches are close to each other.
We also mentioned in our letter that one of the Bank of Israel directives (amendment 411) had as its goal to eradicate money laundering and terrorist financing, maintain the stability and reliability of the banking system so it doesn’t become a tool or a victim of crime, and “uphold the good name of the country."
Why are the banks enforcing restrictions on foreign citizens which don’t contribute anything towards eradicating money laundering and terrorist financing It surely doesn’t “uphold the State of Israel’s good name” to its foreign citizens.
We also asked if it is right that the banks demand compliance with the US FATCA legislation whose purpose is to fight money laundering and terrorist financing or OECD regulations if they cause damage and unfairly burden foreign citizens living in Israel.
Israeli Shortcut, who serves as a voice for this population, hopes that those who stand at the head of the banking system will give ear to the onerous restrictions that this population is experiencing, and will remove the obstacles standing in their way.