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The Knesset Economic Affairs Committee relented this week under pressure from the banks and agreed to reduce Bank of Israel powers to regulate their fees. Supervisor of Banks Rony Hizkiyahu yesterday met with the committee's chair, MK Moshe Kahlon (Likud) to change his mind. Hizkiyahu is currently consulting with other influential MKs on the matter.

The banks oppose the inclusion of small business accounts in a bill that would regulate banking fees. They also want to add a salary cap or some other parameter regarding private accounts that would exempt them from regulation on wealthy customers. The central bank opposes distinguishing between customers based on income criteria. The committee also postponed the upcoming vote on the bill from this Sunday to Monday.

Despite the lobbying, the committee did leave in a clause in the bill that would authorize the central bank governor to issue an injunction on certain service fees if they are deemed to either reduce competition, if the service is only available at the institution in question raising the fee or if the service is vital for managing an individual account.

Association of Banks official Tal Nadav said yesterday it was necessary to reduce the scope of fee regulation and to define clearly the supervisor of banks' powers. Nadav also called for banks to have the right to appeal decisions made by the governor or supervisor of banks regarding fee regulation.

Kahlon yesterday rejected charges his committee had succumbed to bank lobbying. "There's no matter here of folding or compromises," he asserted. "The issue of defining households isn't closed. We'll make all decisions as methodically, professionally, and responsibly as possible."

Consumer Council head Ehud Peleg yesterday called on MKs not to suffice with the formulation of the current bill but rather to include an explicit ban on overlapping fees. He added the multiplicity of fees and the breaking up of banking service fees into several categories, in particular, are the reasons they are so mystifying to the public.