As Israeli Bank Branches Close, the Weak Suffer

With 142 out of 155 branch closures approved, legislators decry banks that are allegedly leaving the poor, the elderly, the disabled, non-Hebrew speakers and the web-illiterate in the lurch

A branch of Bank Leumi in Tel Aviv
Moti Kimchi

The Bank of Israel has only rejected 4% of banks’ requests to close branches, a meeting of the Knesset Finance Committee revealed Monday.

The meeting was called by MKs Itzik Shmuli (Zionist Union), Karin Elharrar (Yesh Atid) and Saeed Alkharumi (Joint List), who say the wave of branch closures, which the banks are doing as many customers go online, hurts the elderly, the disabled and the poor.

The Knesset members say the move is tantamount to serious abuse. The committee chairman, MK Eitan Cabel (Zionist Union), noted that only seven of the 155 closure requests were rejected, with 142 approved.

Banks need the approval of the central bank’s supervisor of banks to close a branch. Between 2010 and 2016, 254 branches closed, about a quarter of all the country's branches. While other branches were opened, the number of branches per 100,000 people is much lower than the average in the OECD, of which Israel is a member.

Branch closures go hand in hand with technological developments by Israel’s big banks, which are increasingly becoming digital banks.

Despite the advantages for tech-savvy customers, this move also creates problems for the web-illiterate and non-Hebrew speakers; the banks’ apps are solely in Hebrew.

“None of us wants to stop progress, but even progress isn’t keeping up with branch closures,” Cabel said. “The Bank of Israel and the banks supervisor are looking first and foremost at the banks, not the people.” He said the MKs’ were obligated to halt the process, by legislation if necessary.

“The banks are trampling on the weakest ones – new immigrants, the elderly, disabled people and others,” said MK Pnina Tamano-Shata (Yesh Atid). “Most branches are closing in the country’s outskirts.”

She said that “it’s enough to come to the bank branches on the 28th each month, the date when thousands of Israelis receive government assistance, to see the strain on the service these people receive on the first floor.”

A resident of Benyamina, Anat Ashad Glazer, told MKs that her local branch would soon close, and that her 77-year-old father, who hasn’t adjusted to the digital revolution, would be left with no options.

A spokesman for the Association of Banks, Tibi Rabinowitz, said that fewer and fewer people were using the branches, which the banks can’t leave empty most of the day. He said there was no intention to leave customers in the lurch, and that the pace of change in Israel was slow and measured compared to the rest of the world.

Cabel called such comments infuriating. He also attacked the Bank of Israel for backing the banks rather than the people, and demanded that the banks supervisor request and review a plan on actions taken to benefit the public.