Israel’s three largest banks accused of law-breaking

by Richard Kilner

Story link: Israel’s three largest banks accused of law-breaking

A NIS 7 billion suit against the three largest banks in Israel has been given the go ahead by the Tel Aviv courts.

The banks, Discount, Leumi and Hapoalim, are accused of breaking antitrust law by fixing charges for interest and services.

Judge Nissim Yeshaya has said that the financial stability of the three banks is not in doubt, although they would have to repay customers an enormous sum of money should they be found guilty.

The judge also said that unless there is evidence of a cause for identical fees at the separate banks that it would be reasonable to assume that the financial institutions had collaborated to reduce competition.

The motion was filed by Sharnoa Automated Machines, who said that customers were paying the price of high interest rates and fees due to a lack of proper competition between the banks.

The three banks have also been alleged to have entered a binding agreement to fix interest rates from 1998-2005.

The statistics presented by Sharnoa have not been contested by the banks, however, they have produced some evidence apparently indicating an absence of price fixing.

Judge Nissim Yeshaya has said that uniform interest rates or identical changes in fees cannot be explained other than by collaboration and agreement.

The banks have been told to pay NIS 60,000 to cover the legal fees of the applicant.