A new law approved by the Knesset, Monday, led the Bank of Israel to issue a working paper for banks Tuesday, in which Israeli banks will now be permitted to accept electronic deposits of checks, according to business daily The Marker. Instead of bringing a check to the bank for deposit in an account, account holders will be able to use apps released by banks to scan checks and deposit them electronically. If a check is not honored by the bank that it is drawn on, customers will be able to find out within minutes, not days that it takes now.
The new measure is part of the Electronic Banking Act passed by the Knesset on its second and third reading on Monday, which is one of a number of laws the Knesset has been working on to reduce the use of cash. Among the laws being developed is one that will limit all-cash transactions to NIS 5,000 or less.
Under that law, it will be illegal for individuals to pay cash of more than NIS 5,000 in a business deal; anything beyond that amount would have to be paid by credit card or other electronic means. The law would eventually be extended to banning the use of checks for deals over NIS 5,000. The point of the law is to reduce the use of “black” money, on which taxes have not been paid.
In a statement, Dr. Karnit Flug, chairperson of the Bank of Israel, said that the new law “will significantly advance the payment system in general, and the use of checks in particular. This is another way to use technology, enabling banks and their customers to take advantage of new advanced, convenient, and cheaper services.”