Bank Discount Offers Interest-Free Overdrafts

YERUSHALAYIM -
At the cash machine of an Israeli Discount Bank branch in Yerushalayim. (Nati Shohat/Flash 90)

The Israel Discount Bank has started a policy of interest-free overdrafts for customers whose current account minus balance is not in excess of 2,000 shekels, Globes reported on Sunday.

In its bid to attract new customers, Discount said it has also cut overdraft credit allocation fees by half—a fee paid by customers who have requested an overdraft framework but have not used it—with more to come.

The new Discount policies come three months after a Bank of Israel reform which made it easier for customers to switch banks. Discount hopes to keep the customers it has, while welcoming transferees from other banks.

The BoI initiative has not yielded much change—a few tens of thousands of customers have reportedly switched—in part because the banks have not done much to compete for new customers.

This may change, observed Globes, with Discount’s moves and the imminent launching the One Zero digital bank, which promises low fees.