Banks Set to Lose NIS 45m From Fees

The commercial banks have suffered a harsh blow: Following decades of providing services to individuals eligible for state-funded housing allowances and collecting commissions totaling NIS 45 million a year, banks are now out of the picture.

A Finance Ministry tender for the provision of services has been awarded for the first time to companies not belonging to the banking system - Amidar, Matan Chen and the Center for Computerized Collection. The tender, published two months ago, was designed to streamline services.

The commission fees offered by the three tender winners amount to around one-third of the fees collected for years by the mortgage banks. The treasury estimates that the new arrangement will save the state some NIS 30 million a year, and NIS 150 million over the entire franchise period.

About 180,000 individuals receive housing allowances, according to ministry figures.