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Government and institution measures in response to COVID-19.

Government and institution measures in response to COVID-19.

General Information

  • On 27.01.2020, The Minister of Health signed the People's Health Decree to expand the Ministry's powers to deal with the Coronavirus pandemic. Starting from 2.2.2020 the government started gradually closing sea and land crossings, air transfers (deny entry to anyone who is not an Israeli resident), isolation requirements, till general lockdown on 7.4.2020. On 19.4.2020 the Government started discussions on “exit strategy” measures, including approval for amendment to Emergency Regulations (Limits on the Number of Workers in the Workplace for Reducing the Spread of the Coronavirus) and reopening of several businesses and services.
  • In parallel the Government and the BoI took significant measures for economic stimulus to the real economy and liquidity support. Financial regulatory authorities were also dealing with the impact of the virus on several sector's in order to support the financial system and the economy. Additional measures in telecommunication area, cyber and privacy issues.
  • Israel has announced a raft of measures across all areas, including extending tax deadlines, freezing enforcement actions, creating a special loan facility for SMEs and increasing flexibility in the employment market, amongst other measures. The Israeli government on 27 March 2020 published Temporary Regulations #8432 to provide tax-relief measures related to the coronavirus (COVID-19) pandemic.
  • On 4 May 2020, The Cabinet approved a series of additional amendments to the emergency regulations that will allow the economy to return to activity in the shadow of the coronavirus. The amendments cancel restrictions on leaving one’s home except to places and activities that are prohibited in the regulations. These regulations include a selective return of the education system, retail sector, transportation and domestic tourism. The government has announced a gradual and controlled lockdown relief performed in 4 stages starting of 04.05.2020 by opening national parks, malls, allowing social gatherings up to 20 people and the opening of schools under certain limitations etc, and due by the 14.06.2020 with the opening of universities, theatres and allowing social gathering with no limitations.
  • The government defined one of the following criteria as a cause to return to lockdown:
    • 100 new daily cases of infection (excluding outbreak centres).
    • A viral replication rate of less than 10 days.
    • 250 patients in a critical condition.
  • The Cabinet approved the extension of “Emergency Regulations (Restricted Zones)” until 17.8.2020. The relevant ministerial committee will be able to declare communities, or sections of communities, in which there have been coronavirus outbreaks, to be restricted zones.
  • The Cabinet decided to extend the validity of the authorization of the ISA to assist in the national effort to reduce the spread of the coronavirus until Tuesday, 16 June 2020, or until completion of the legislative process and the entry into effect of the legislation. The decision will be submitted to the Knesset Foreign Affairs and Defense Committee for approval. As of today the legislation has been completed and approved and will have to be renewed every 21 days.
  • It should be emphasized that in recent weeks, due to the relief in the restrictions, there has been an increase in the number of positive tests for covid-19. Two of the above three "return to lockdown" criteria have been met and thus, in order to flatten the curve, the government has ordered reintroduction of some of the lifted restrictions.

Tax measures – Direct and Indirect

(e.g. payment deferrals, rate reductions…)

Click here to see a comprehensive summary of jurisdictional tax measures and government reliefs in response to COVID-19.

Employment-related measures

(e.g. state compensation schemes, training…)

Aid Program to Support the Economy During the COVID-19 Novel Coronavirus Crisis
As stipulated by Basic Law, the Minister of Finance presented the Government with a plan detailing the financial aid expenditure for 2020-2021. The expenditure during the coronavirus crisis in 2020 is expected to exceed ILS 50 billion. The total plan amounts to ILS 80 billion. The Economic Assistance Program includes 4 strata: Immediate Response for the Health and Civil Sectors (NIS 11 billion), expanding the Social Security Network (NIS 24 billion), Business Continuity Assistance and Acceleration.
As of 8 May, the Treasury's government assistance program for dealing with the Corona will be expanded from NIS 80 billion to NIS 100 billion. 
  • Grants for self employed
    • Round 1 – up to 6,000 NIS grant under certain conditions to self-employed individuals if their taxable income in 2018 was between 24,000 to 240,000 NIS, and if there was a 25% decrease in turnover during March-April compared to the same period in 2019.
    • Round 2 - Under certain conditions, the Israeli Government will extend special grants to self-employed and controlling shareholders who are individuals, if their taxable income did not exceed NIS1m in 2018 and if there was a 25% decrease in turnover during March-June compared to the same period in 2019. Grants are expected to be up to 70% of the decrease in turnover, limited to NIS10,500. (Both rounds have been exhausted).
    • Immediate grant for self-employed and businesses for the months May-June 2020 – Eligibility depends on receiving grants in previous rounds. The maximum available sum is NIS 7,500.
    • Continuing grant for self employed and businesses – self employed and businesses with a maximal annual taxable income of NIS 640,000 and a minimum decrease in turnover of 40%, will receive a grant of 70% of their taxable income up to a maximum of NIS 15,000 every 2 months until June 2021. (Yet to be approved).
  • Broader criteria for receiving unemployment pay and grants for over 67 year olds - Employees aged 67 an over who were fired or given unpaid leave are eligible for a grant of ILS 4,000. Unemployment pay will be automatically extended until 30 April for anyone whose eligibility ended after 1 March. Further extension to 31 December 2020 is expected to be approved by the government (announced 9.7.2020).
  • Pay for workers on unpaid leave – Workers on unpaid leave from their employer are eligible to claim up to 80% of their last salary from the Israeli Employment Service.
  • Changes in unemployment benefits
    • The period for receiving unemployment benefits has been extended until the end of June 2021 or until the rate of unemployment is reduced to under 10% (as of today the unemployment rate is 21%).
    • The required period for receiving unemployment benefits has been shortened to six months for whoever began their unemployment period by the end of April (instead of 12 months).
    • Payment of double benefits is approved till end of June 2021.
  • Training for unemployed - Extensive increase in the scope of professional training and the integration of employers in the training process. (In planning stage, not yet approved).
  • One-time Passover relief grant of NIS 500 for each child up to 4 children per family. (Status: completed).
  • Grant plan for every citizen - An allocation of NIS 6 billion for financial assistance to citizens has been approved due to the corona crisis. The plan includes a grant for every citizen between NIS 750 to NIS 3,000. Conditions of the plan and exact allocation of funds is yet to be approved and is still in discussions.

Economic stimulus measures

(e.g. loans, moratorium on debt repayments…)

Grants for Businesses
  • Round 3 - grant for fixed expenses has also been opened for applications till 10.8.2020. The grant is designed to participate in some of the businesses fixed expenses that have not been saved, such as rent, electricity, water, etc. The grant is extended to companies and partnerships whose turnover in 2019 exceeded NIS 18,000 and did not exceed NIS 20 million and for a self employed individual whose 2019 turnover exceeded NIS 300,000 and did not exceed NIS 20 million, if the March to April 2020 turnover decreased by more than 25% compared to the same period last year (and if such decrease was caused by the economic damage due to the pandemic).
  • Grants for businesses and self employed with a turnover of up to NIS 100 million and a decrease in sales of at least 40% relative to the corresponding period in previous year, will receive a grant every two months until June 2021 as follows:
    • Business with an annual turnover of up to NIS 300,000 will receive a small business grant between NIS 3,000 – 6,000.
    • Business with an annual turnover between NIS 300,000 to NIS 1 million will receive a grant for fixed expenses up to NIS 500,000 and not exceeding 15% of annual turnover.
  • New Business grant for businesses established between January-February 2020. The grant is paid every two months till June 2021. 
    • Business with an annual turnover of up to NIS 100,000 will receive a grant of NIS 3,000.
    • Business with an annual turnover of over NIS 100,000 will receive a grant of NIS 4,000.
  • Relief for non-profits and NGOs - Relief for voluntary partnerships supported by the government. The outline is in planning and will be published soon.
  • Postponement of payments to VAT, NII, electricity, water, etc. (NIS 9 billion). VAT, NII, electricity, and water payments have been postponed to provide relief to businesses. (status: completed).
  • Property tax grant for businesses with an annual turnover of up to NIS 100 million that have experienced a decrease of at least 60% in their sales turnover, will receive a refund for property tax expenses for the business until the end of June 2021. Announced on 9/7/2020.
  • Tax rebates (NIS 3 billion) - Tax rebates for January and February tax advance payments. (In planning).
  • 3 months discount in council tax (NIS 2.6 billion) – Businesses that were permitted to remain open are not eligible for the council tax discount. The discount will be given to eligible businesses in the following sectors who pay property tax: offices, services and trade, industry, crafts, hotels, paid car parks and reserved lands for events and factories. (status: completed).
  • Leverage funds (NIS 4.5 billion) - Establishment of joint investment funds for the government and institutional bodies to help Israeli companies raise funding for their activities. The outline for the funds is in planning.
  • Helping businesses meet Ministry of Health requirements (NIS 0.7 billion) – A budget for helping businesses affected by the pandemic to meet the Ministry of Health requirements. The Agency for small and medium businesses will publish business support tools for businesses to meet the new requirements, including transition to online commerce, deliveries and required physical adjustments. In addition, an auxiliary route for industry to transition to modern production is also expected, which will also focus on the new requirements in wake of the coronavirus crisis. The Small and Medium Business Agency will receive additional resources and will be extended by 3 additional years. (In progress).

Dedicated state loan fund for small and medium businesses

  • On 8 March, the Finance Ministry opened a special loan facility for struggling companies to receive support from the State Guarantee Fund for Small Businesses. The facility is primarily aimed at SMEs. It provides working capital loans of up to 5 years to a maximum of NIS 500 000 or up to 8% of the company’s last annual turnover, with options to defer payment for half a year. Banks are expected to provide credit approval within nine working days. 
  • On 11 March, the Government announced a further NIS 10 billion support package, doubling the amount available under the loan fund. 
  • On 16 March, the government announced further measures of importance to SMEs, which include (alongside measures to enhance access to loans already announced):
    • Advance of payments to small and medium government suppliers; 
    • Postponement of self-employed, small and medium business mandatory payments; 
  • Furthermore, a number of other policy measures are currently in place: 
    • Reducing the level of collateral for businesses (while increasing government guarantees at the same time) in the Small and Medium Business Fund from 25% to only 10% for any business that submits a signed statement regarding damages from the Coronavirus. The fund's credit line will be increased to four billion NIS. 
    • A support package of 10 billion NIS to SMEs, mostly through the State guarantee Fund to SMEs, to finance working capital in view of cash flow difficulties: 
      • State guarantees increased to 85% of the loan amount 
      • Reduced collateral up to 10% 
      • Longer repayment period up to 5 years 
      • Shortened loan approval at the bank – up to 9 working days 
      • Loan up to 500 000 NIS or 8% of the company’s annual revenue (the highest between the two)
    • On 9 July 2020 the government has announced a further increasing in the state guaranteed subsidized loans and improved terms for the loans. Expanding state-guaranteed subsidized loans to small, medium-sized businesses by NIS 28 billion and raising it to NIS 50 billion. Increasing the volume of loans to up to 24% of the business turnover, introducing additional players and the possibility of taking a loan from two different entities. The expansion of the fund requires the approval of the Finance Committee.
  • Dedicated state loan fund for large businesses (NIS 7 billion)
    • On 3 May, the Ministry of Finance announced a State Loan Guarantee Fund for Large Businesses. The fund will provide loans through banks and institutional bodies that choose to join the fund, for businesses with a turnover of NIS 200 million or more in branches affected by the Corona crisis. The loan will amount to 8% of the annual revenue turnover and up to NIS 100 million. The fund is expected to provide a solution to hundreds of companies in the economy. The new NIS 6 billion State Guarantee Loan Fund is intended for businesses with a turnover of NIS 200 million or more, employing at least 100 employees in Israel and at least 50% of the Company's productive or intellectual property is registered in Israel, in sectors that have difficulties in liquidity as a result of the Corona crisis. The state guarantee will be 75% with a business owner's deposit of only 5%. The loan will be given for a period of up to 5 years. Much like the State Guarantee Loan Fund for medium-sized small businesses, here's a 12-month grace period on the loan. It also requires that the company did not receive a loan under the COVID-19 SMEs parallel scheme.
    • Israel’s five largest banks, which account for about 99% of overall banking activity, declared a deferment of mortgage and loan payments (with a waiver of deferred payment fees) for the next three months. Israel’s largest mortgage bank, bank Mizrahi Tefahot, will postpone payments for four months. 
    • The same applies for state-funded mortgages. 
    • As directed by the Accountant General of the Ministry of Finance, the government pays its suppliers within a few days, while the maximum amount of time to refund businesses was reduced from 45 to 30 days. 
    • Promoting local procurement: encouraging residents to buy from local SMEs by local authorities, through investments in marketing within the community. 
    • On 15 March ,the Accountant General of the Treasury, together with the Ministry of Construction and Housing, ordered relief on mortgage loan payments for eligible borrowers for up to 4 months, to help those affected by the coronavirus crisis. As part of the relief, each borrower can apply for postponement of mortgage payments without needing to go to bank branches, a response will be received within one week of applying and new collection proceedings of any kind against arrears will be frozen.
    • On 3 May, the Ministry of Finance announced a State Loan Guarantee Fund for Large Businesses. The fund will provide loans through banks and institutional bodies that choose to join the fund, for businesses with a turnover of NIS 200 million or more in branches affected by the Corona crisis. The loan will amount to 8% of the annual revenue turnover and up to NIS 100 million. The fund is expected to provide a solution to hundreds of companies in the economy. The new NIS 6 billion State Guarantee Loan Fund is intended for businesses with a turnover of NIS 200 million or more, employing at least 100 employees in Israel and at least 50% of the Company's productive or intellectual property is registered in Israel, in sectors that have difficulties in liquidity as a result of the Corona crisis and offers 8-high loans. % Of business turnover up to NIS 100 million. The state guarantee will be 75% with a business owner's deposit of only 5%. The loan will be given for a period of up to 5 years. Much like the State Guarantee Loan Fund for medium-sized small businesses, here's a 12-month grace period on the loan.
    • On 4 May, the Finance Committee approved the Ministry of Finance's request to increase the State guarantee loan for additional small and medium-sized businesses by NIS 6 billion, which puts the total amount of the fund at NIS 14 billion. In view of the large number of applications and the high approval rate, the Accountant General is preparing for the full utilization of the fund, which is expected to be implemented shortly. Since the beginning of the fund's operations, approximately 50,000 applications have been submitted for a total of about NIS 32.8 billion, the processing of about 23,200 applications has been completed, of which 15,700 loans have been approved, which puts the loan's approval at about 68%. The total utilization of the fund so far is NIS 5.9 billion.

Ministry of Environmental Protection Gives Manufacturers, Importers, Retailers, Recycling Corporations More Time to Submit Reports and Deposit Funds

  • As a result of the spread of the coronavirus and the resulting economic and business consequences, the Ministry of Environmental Protection has examined the requirements detailed in environmental legislation on extended producer responsibility. EPR imposes responsibility for a product's entire life cycle upon the manufacturer and importer of that product, including treating the product after the consumer no longer wants it. Israel has five laws in its EPR system: the Deposit Law on Beverage Containers, the Tire Disposal and Recycling Law, the Packaging Law, the Electrical and Electronic Equipment and Batteries (or e-waste) Law, and the Plastic Bag Law.
  • The support include:
    • Deferral or cancellation of first-quarter reports;
    • Two-month deferral of annual reports submissions for packaging waste and electric/electronic waste;
    • Deferral of financial deposits from importers and manufacturers that are made through recycling corporations to designated funds, deferral of required awareness campaign activities, deferral of waste surveys, and deferral of submission of work agendas.

Emergency Regulations - Business Licensing and registration

  • The regulations provide a 2 month postponement of the bureaucratic processes for business owners. Additionally, any existing permits, licenses and permits granted by authorities to business owners will automatically be extended for another 2 months. All fines will also be postponed. The decision was submitted by the Ministry of Justice and the Interior.
  • Among the approved regulations:
    • Licenses to operate a business in all local authorities will be automatically extended, in order to assist businesses working with reduced staff and businesses that have been forced to close temporarily.
    • Licenses required for running a business from government will be automatically extended. For example, Fire and Emergency, Ministry of Health, Environmental Protection and more.
    • There is no need to renew permits for continued operations. Permits will be automatically extended for another 2 months.
    • All import permits will be renewed automatically to allow the import of goods into the economy and prevent shortages and delays.
  • On 9 July 2020 the Ministry of Finance announced further extension of the validity of the business license until the end of June 2021. (Yet to be approved by the government).

High-tech financing solutions and rescue plan (NIS 1.5 billion)

  • NIS 1.2 billion for funding high-tech companies through fast Innovation Authority programs and high advances. 
  • NIS 300 million for institutional investment assistance in high-tech companies. (The details of the plan are in planning).

Financial Services and banking regulators

(rules, directives, etc)

In order to combat with COVID-19, BoI acts in the following areas:

  • Operation in the new reality, including remote activity and business continuity;
  • Measures to support liquidity in financial markets and economic stimulus;
  • Risk management;
  • Consumer protection and other support for households, businesses and corporations;
  • Additional regulatory relief.

Some directives and temporary relief guidance mentioned in this slide.

In order to combat with COVID-19, BoI acts in the liquidity provider

  • 7.5.2020 - From the beginning of the crisis until the end of April, the banks extended the payment of loans to 450,000 customers in all segments of activity, totalling NIS 5.2 billion, unprecedented. In order to continue helping the bank's clients to cope with the crisis, while managing sound and responsible risks, and to create certainty for the general public about payment options, a uniform outline for loan repayments has been formulated, which has been adopted by all banks as of 7 May. The type of assistance required for those affected by the crisis is divided into two types: households and businesses whose crisis evening met their loan repayments and that the damage to their income is expected to be short-term can succeed through the crisis through credit assistance or repayment of loan payments. As long as the impact on income is long-term, or the business is at high risk and there is doubt about its ability to meet the loan repayment for a long time, there is no room for increased credit, and the aid can only be provided in the form of state aid or credit provided with a high government guarantee. This is especially true of high-risk industries. The outline refers to the repayment of loan payments in three sectors of activity (mortgages, consumer credit and business credit), and allows households and small business owners to defer loan payments as follows:
    • Mortgage - repayment will be made for a period of 6 months, with no limit on the amount of the loan balance.
    • Consumer loans - The repayment will be made for a period of 3 months for loans with a balance of up to NIS 100,000. In addition, there is an option (at the discretion of the bank) for a further 3-month deferral of these loans.
    • Small Business Loans - Repayment will be made without limitation on the amount of the loan balance, for a period of up to 6 months, in accordance with the Bank's discretion.
    • Fees - No fees will be charged for deferred loan payments.
    • Interest Rate - Deferred payments will carry interest that does not exceed the interest rate in the loan contract. It is important to emphasize that postponing a loan payment is like taking out a new loan at the amount of the deferred amount.
    • How to distribute loan payments - Mortgages will be spread over the entire balance of the loan period, and consumer credit and the payment business will generally be deferred until the end of the loan period.
    • Period for applying for deferral of payments - You can apply to the Bank for deferral of loan payments, according to this outline, until 31.7.2020.
  • 21.04.2020 - Facilitating Housing Loans Given the Corona Crisis - aimed to reduce the effects of the corona crisis on mortgage and all-purpose creditors (in a mortgagor). These include: 
    • Relief of Limitations on Housing Loans for Unpaid Vacation Workers - Due to the Corona crisis, many workers were expelled to the Unpaid Vacation, and their income was reduced accordingly. Threshold of PTI/DSR (which stands at 50% of both borrowers' income) may be barred for them from obtaining a mortgage, and in some cases blocked from meeting existing purchase obligations. The Temporary Order provides that, if a number of conditions are met, the banks may provide mortgages according to the borrower income prior to their Unpaid Vacation.
    • Reduction of the additional 1% capital requirement for housing loans that are applied during the Corona crisis (until 30.09.2020 unless will extended by the BoI).
  • 21.04.2020 - Facilitating Housing Loans Given the Corona Crisis - aimed to reduce the effects of the corona crisis on mortgage and all-purpose creditors (in a mortgagor). These include: 
    • Relief of Limitations on Housing Loans for Unpaid Vacation Workers - Due to the Corona crisis, many workers were expelled to the Unpaid Vacation, and their income was reduced accordingly. Threshold of PTI/DSR (which stands at 50% of both borrowers' income) may be barred for them from obtaining a mortgage, and in some cases blocked from meeting existing purchase obligations. The Temporary Order provides that, if a number of conditions are met, the banks may provide mortgages according to the borrower income prior to their Unpaid Vacation.
    • Reduction of the additional 1% capital requirement for housing loans that are applied during the Corona crisis (until 30.09.2020 unless will extended by the BoI).
  • 21.04.2020 - The Banking Supervision Department (BSD) published a guidance regarding the implementation of requirements set in Reporting Directives, on accounting treatment of borrowers who temporarily encounter payment difficulties due to the COVID-19 crisis. The BSD encourage banks and credit card companies to act in a prudent and proactive manner to mitigate temporary adverse impacts on households and businesses which are affected by COVID-19, in line with the long term interest of the banks, their borrowers and the overall economy. In addition, the BSD provide guidance regarding troubled debt classification, and clarifies that short term loan modifications (for example, 6 months), such as payment deferrals, late fee waivers, or extensions of repayment terms, do not automatically result in a troubled debt restructuring classification of loan modifications. The statement is similar to recently published guidance by regulatory agencies in the US and the world.
  • 21.4.2020 - Disclosure Guidance and Highlights for public reports for the first quarter of 2020.
  • 19.4.2020 - Clarifications regarding the Supervisor’s guidelines related to suspending account restrictions in respect of checks without cover, in order to avoid the negative impact on customers whose income has decreased markedly and who are liable to become restricted customers. However, it is important to note that these guidelines do not cancel the restrictions (it is only a suspension) and that checks that currently are not counted toward the imposition of a restriction are liable to lead to a restriction at the end of the suspension period. 
  • 2.4.2020 - Leniencies in adding customers to remote execution of transactions and in issuing debit cards to customers.
  • 29.3.2020 - Reducing capital requirements for banks and directing them to examine the distribution of dividends to increase credit supply to the economy - Since the outbreak of the crisis, the demand for credit has risen sharply, and at the same time, the level of risk in providing credit has increased, given the deterioration in the economic situation of businesses and households. In order to ensure the ability of banks to continue to offer credit, the BSD announce the reduction of regulatory capital requirements by one percentage point, so that the minimum requirement will chance as following:
Minimum capital requirement
31.12.2019 (prior reduction)* From 29.03.2020 till 30.09.2020**
From 30.09.2020 till 30.09.2022**
CET 1 9% or 10% (large banks) 8% or 9% (large banks) Minimum requirement will stand at the lower between (1) actual capital ratio at 30.09.2020 or (2) original capital requirements.
Total capital 12.5% or 13.5% (large banks) 11.5% or 12.5% (large banks)
  • 6.04.2020 - Reduce interest rate by 0.15 percentage points to 0.1% and other monetary measures– 
    • The Bank of Israel offers banks a plan to increase the supply of credit for small and small businesses - The program will amount to NIS 5 billion. The Bank of Israel will provide the banking system with fixed-rate 3-year loans at a rate of 0.1%, with the aim of increasing the bank's credit supply to small and small businesses, and helping them to cope with the Corona crisis and return to full activity when possible.
    • The Bank of Israel expands the repo tool to include corporate bonds as collateral - the Bank of Israel will, in addition to government bonds, also receive corporate bonds rated AA or higher, as part of the repo transactions with the financial institutions. The purpose of expanding the range of collateral is to allow flexibility for authorized entities to use this tool and to ensure the Bank of Israel's ability to support the shekel liquidity in a financial system.
  • 15.03.2020 - 23.03.2020 - The Bank of Israel purchases NIS 50 billion in government bonds to ease credit conditions in the economy and support economic activity. Concurrent with the bond purchase program, the Bank of Israel will continue to allow financial entities to execute repo transactions with it using government bonds as collateral as announced on March 15, 2020, as well as the NIS dollar exchange rate tender program announced by the Bank of Israel on March 18, 2020.

* On top of this will be added additional 1% on mortgage loans/total RWA.

** On top of this will be added additional 1% on mortgage loans/total RWA except mortgages provided in the period from 29.03.2020 till 30.09.2020.

  • 14.7.2020 - The Banking Supervision Department announces the expansion of the comprehensive framework for deferring loan payments
    In May 2020, the Banking Supervision Department announced a comprehensive framework that was adopted by the banking system for deferring loan repayments, as assistance to bank customers in dealing with the ramifications of the coronavirus crisis.
    In March–June 2020, the banks deferred loan repayments for approximately 553,000 customers in all activity segments, at a total value of approximately NIS 7 billion. With the goal of continuing to assist customers in dealing with the case flow difficulties due to the ramifications of the coronavirus crisis, while managing risks in an informed and responsible manner, the Banking Supervision Department announced an extension and expansion of the previous framework for deferring loan repayments, as follows:
    • Regarding mortgages, consumer credit and business credit: The period for submitting a request for a deferral of loan repayments will be extended to October 30, 2020.
    • Mortgages: Customers who have already received a deferral of mortgage repayments will be able to defer the payments until the end of 2020, even if the deferral exceeds 6 months. Customers who have not yet deferred mortgage repayments, and ask to do so, will be able to defer the payments for 6 months.
    • Consumer loans up to NIS 100,000: Customers will be able to defer such loans for up to 6 months (at the customers’ choice) without the bank’s judgment, as opposed to the previous framework in which the deferral was for 3 months.
    • We emphasize that the framework that was formulated presents the minimum terms for deferring the loans, and each bank may expand it for the benefit of its customers and at their request.
    • The Banking Supervision Department will continue to follow closely the developments and the dynamic ramifications of the crisis, and will examine additional ways to assist households and businesses.
  • 24.6.2020 – The Supervisor of Banks has sent a letter to the banking system regarding “Providing a response for customers enduring economic difficulties against the background of the coronavirus crisis”
    The banking system has returned to full operation in view of the COVID-19 pandemic, as most restrictions have been cancelled and the economy has begun returning to regular economic activity. However, in view of the high rate of unemployment and the negative impact to economic activity, many households and businesses continue to suffer from the ramifications of the corona crisis. In view of this, the Supervisor of Banks today sent a letter to the banking system in which he clarifies how the banking corporations are to work in order to help customers that are encountering difficulties due to the crisis.
    The Supervisor’s letter emphasizes that in accordance with existing Supervisory Directives, if a customer experiences financial difficulties and has trouble meeting his obligations toward the banking corporation, the banking corporation must try to exhaust all available avenues to collect all components of the debt before initiating legal proceedings, while maintaining fairness and transparency throughout the debt collection process.
    This is even more the case in the current situation, and as such, the banking corporations are being asked to continue operating in this manner with even greater intensity than usual, with the aim of identifying difficulties and helping their customers get through this challenging period as quickly as possible, so that they can help prevent the escalation of debts and future deterioration of their customers’ situations.

Other measures and sources

  • Flexible payments for electricity bills. 
  • Freezing enforcement actions, including new foreclosures and the postponement of outstanding foreclosures. 
  • Reducing the enforcement of by-laws within certain local administrations vis-à-vis businesses. 
  • Creating a network of local authority’ representatives, for peer learning and communicating “field” knowledge to the Ministry of Economy, and vice versa. 

Main sources of information:

Contact us

Tax: Dina Pasca-Raz – dpasca@kpmg.com
Regulatory and risk content: Evgenia Kremer – ekremer@kpmg.com