Publish date:

Banks exploit directive to prevent provident fund customers transfer to competitors

Loss of high yield is biggest incentive for clients to stay on

The banks are using an existing instruction on the revaluation of provident fund assets to pressure fund members seeking to transfer their funds to other banks, Ma'ariv reports.

The directive determines that any member transferring to another fund, will lose the yield on his fund for that month.

In December and January the yields on the funds were high, and the banks are using this to talk members out of switching to another fund.

Ma'ariv received a letter sent this month by the management of funds at Israel Discount Bank to members who expressed their desire to transfer to another fund.

TheStreet Recommends

The letter explained that if a member was to leave the fund in December he would lose a 4.5% yield (the yield on the Tamar fund that month) and get the nominal 0.4% yield usually paid to anyone leaving the fund. Most of htese efforts seem to have born fruit, as few customer transitions have actually been made.