BOI Goes After Online Money-Laundering

Last week, the BOI circulated a draft memorandum calling for restrictions on opening online accounts aimed at combating money-laundering practices, which are easier to do without face-to-face identification of the account holder.

Accordingly, opening an online account will only be possible for people who already have a bank account, and one of the preconditions for activating the account is transferring funds from another bank account that is in the customer’s name. In other words, it is designed to keep out new customers.

The BOI set additional restrictions for accounts opened online: a ceiling on cash transactions of NIS 10,000, and other activities up to NIS 50,000. Furthermore, the balance on the account may not exceed NIS 300,000, and signatories may not be authorized on the account.

The restrictions can be lifted if the customer appears in person at one of the bank’s branches and completes the identification process.

When opening an online account, a customer will need to send the bank a copy of his or her identification card. There will also be a video chat with the bank to enable the bank to clearly identify the customer. This type of account will carry a special marker within the bank’s system, in order to identify risks.

The Bank of Israel has only published a draft at this stage, but once the final version is issued, the directive will go into effect. Any bank that wishes to allow its customers to open an online account will need to inform the Bank of Israel of their intentions 60 days in advance.

This article appeared in print on page 7 of the April 3rd, 2014 edition of Hamodia.