Antitrust Commissioner Dror Strum informed the banks yesterday that he has no intention of going back on his decision to declare the cooperation between the banks in several fields as a cartel arrangement (that is, illegal and therefore to be stopped). But at the same time, he announced that certain arrangements which include clearing and automatic banking services (ATMs) would be exempt from the ruling.
Agreements between the banks and the anti-trust commissioner of the time were reached on a number of matters back in 1985, but last year Strum made clear that the arrangements were not legally binding and that he had every intention of abolishing them. Among the issues that have since been canceled, were the sharing of information between the banks about clients' financial positions, their ability to pay and the level of their financial commitments.
The other matters covered by the banking arrangement were to be discussed, and Strum had asked the banks to put forward their positions. The banks asked for further exemptions on three issues: joint ownership of the automatic banking services company (known by the Hebrew acronym Sheba) and commissions from this, the joint ownership of the centralized clearing system and the payment arrangements on direct debits.
Bank fees for ATM
According to the current system, when a client of Bank A conducts a transaction at an ATM belonging to Bank B, then Bank A pays 20 cents to Bank B, whereas if the client withdraws cash from an ATM belonging to the jointly owned automatic banking services company then Bank A pays only 5 cents. Strum's new ruling demands that in the former case, the payment should also be 5 cents. Though the difference is not transparent to the client, Strum concluded that these inter-bank charges are eventually passed on to the customers.
On the matter of direct debits, Strum rejected the banks' position on their current arrangement. At present, one bank coordinates payments via direct debits on behalf of each supplier (for example, Israel Electric Corporation or Bezeq). That bank pays every bank which transfers money for the debit 32 cents for each transfer, and the supplier pays the coordinating bank for providing its centralized services.
The anti-trust commissioner made it clear that he regards the charges (again, between the banks and unknown by the clients) for carrying out these payments as too high, and that he has therefore decided to declare this part of their agreement as anti-competitive i.e. illegal. Strum gave the banks several days to respond to his decision before implementing new arrangements which would comply with his new ruling.
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