An amendment to Israel’s law about checks that have no cover requires banks not to bounce checks without first notifying the customer and giving one day’s grace, comes into effect today. The amendment provides banks customers with a brief period in which to deposit the shortfall into their account and thus avoid the negative listing as a restricted customer. Customers will be required to deposit the shortfall in their account, two and a half hours before the end of the banking day – in other words by 4pm.
Until now banks were not required to notify their customers that a check was not going to be honored. Customers often discover the fact only when it is too late and the check has already been refused by the bank. After 10 checks have been dishonored, by law the customer suffers the economic shame of becoming a ‘restricted customer.’
The amendment, initiated by MK Yakov Asher (United Torah Judaism), requires the banks to send a text message to the account holder or leave a recorded phone message that their bank balance is not sufficient to cover the check.
Asher said that the amendment does not only help the customer whose check would not have been honored but also the recipient who will receive the money that they are owed.
Asher said, “This is an important social law of the first rank which will bring about a big revolution in the banking system and correct an injustice that has been around for years. I welcome the Bank of Israel’s campaign to implement a transformation in the banking system. This is good news that will benefit all parties – the customers and the banks.”
Published by Globes, Israel business news – en.globes.co.il – on August 19, 2021
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