The Bank of Israel has issued numerous directives to the banks in recent years, some more significant and some less. It appears, however, that the order recently issued by the central bank, ostensibly technical, is putting the banks under a great deal of pressure. Two weeks ago, the Supervisor of Banks sent a letter to the banks listing a series of instructions on how they set their policy on granting and marketing loans. The Bank of Israel was worried mainly about the aggressive marketing being conducted by most of the banks for loans to households, which has caused an increase of over 20% in this type of credit over the past three years.
The banks are being required to observe a series of regulations including setting a policy and rules for contacting customers with credit offers, and defining the appropriate target audience. The most difficult clause for the banks, however, is seemingly purely technical - under the new instructions, starting in September, the banks will have to record conversations with their customers dealing with credit. As of now, the banks have no system for recording conversations in their branches, only at call centers.
The banks say that including all their branches in a network for recording calls is a very difficult and complex process that cannot be carried out in two months. "Just conducting a tender for selecting the company to connect the branches to a network will take several weeks," a source at one of the banks said. The banks also believe that the cost of such a project and its regular maintenance are liable to reach tens of millions of shekels.
Furthermore, the Bank of Israel explicitly emphasized that the customer's calls on other subjects in which the subject of selling credit was raised must also be recorded. The banks say that such calls cannot be sorted, so they will eventually have to record all their calls with customers, and store the recordings.
"These are very aggressive instructions. The question of the increase in household credit is significant, but not only is the solution they are presenting aggressive, but it is also technical," a source at one of the banks said. The banks say that recording conversations is a cumbersome and expensive solution, and that if the Bank of Israel was really concerned about the sharp rise in credit to households, it could impose restrictions, similar to the restrictions it imposed in the mortgage market.
Published by Globes [online], Israel business news - www.globes-online.com - on July 5, 2015
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