(2) Opening a current account in Israeli currency, and managing it as long as one of the following exists:
(a) The account with a credit balance in favor of the customer;
(b) The customer complies with the terms of the agreement between him and the banking corporation in connection with the management of the account;
(3) the sale of bank checks in Israeli currency and foreign currency; "
The provision of section 2(b) further states that: "Stipulating unreasonable conditions for the provision of service is lawful as an unreasonable refusal to give it."
- The provision of Section 2 of the Banking Law, which imposes a special arrangement in the framework of which there is a statutory obligation on the banking corporation to provide services, derives, inter alia, from the fact that the right to provide these services was reserved for banking corporations, and therefore the public can only receive them from a banking corporation in accordance with law. Moreover, the obligation to provide service stems from the built-in power gap between the bank and the customer, and from the fact that the customer's dependence on the banking institution relates to the receipt of essential services to the public [see the Banking Bill, Service to the Customer (Amendment 12) Promoting Competition), 5767-2007, H.H. 76-77].
I will note that from the rule of no that appears in this section, it is possible to hear the following, i.e., a banking corporation may refuse to provide the services listed in this section, provided that it is a reasonable refusal.
- In Civil Appeal 6582/15 Emaar Association for Economic Development and Growth v. Postal Bank, Israel Postal Company in Tax Appeal [published in Nevo] (November 1, 2015) (hereinafter: "the judgment in the case of Emaar Association"), the Supreme Court was asked, for the first time, to address the question of when a bank's refusal to maintain a bank account would be considered a reasonable refusal, and ruled that the burden of proof of the reasonableness of the refusal rests with the bank. It was further determined that while a vague concern of improper conduct in the account is not sufficient, the burden of proof required of the bank is lower than the balance of probabilities and is consistent with the burden required of an administrative authority when making a decision that falls within its discretion. In the words of the Supreme Court, the Honorable Justice Sohlberg:
"This court has not yet dealt directly with the question of when a refusal will be considered a reasonable refusal, but the question has been discussed in the literature and has arisen in a number of cases that have been heard in the district courts (in relation to the prohibition stipulated in the Banking Law). From these sources, it emerges that the rule that was formulated is aided by the principles of administrative law, and gives the bank a reasonable framework to exercise its discretion in the matter. With regard to the range of typical cases in which a reasonable decision was made regarding the closure of an account, cases of unfair or negligent conduct on the part of the customer in managing his account were mentioned, in a manner that causes damage to the bank or the public - whether it is illegal activity related to money laundering, terrorist financing, speculative activity, etc. Other cases relate to the specific behavior of the account holder and his attitude toward the bank clerks, such as unfair behavior, the use of physical or verbal violence on the part of the bank clerks, or even the threat of physical or verbal violence (see Ben Uliel, Banking Law (General Part) 433 (1996); Opening Stimulus (Center) 11043-12-08 Kaplan Meat Marketing in a Tax Appeal v. Union Bank of Israel Ltd., [published in Nevo], paragraph 3 (April 23, 2009); Civil Case (Haifa) 19332-12-11 Shlesh v. Mizrahi Tefahot Bank Ltd., [published in Nevo] para. 23 (February 18, 2014); Civil Case (Tel Aviv-Yafo) 11134-11-12, 3d Avivim in Tax Appeal v. Bank Hapoalim Ltd., [published in Nevo], paragraphs 4-5 (May 8, 2013); Opening Motion (Nazareth) 29308-03-15 Bustan Hermon for Trading in Tax Appeal v. Bank Hapoalim Branch 744, [published in Nevo], para. 10 (April 13, 2014), etc.). In all of the aforementioned cases, the burden of proof of the reasonableness of the refusal is on the bank. A vague concern is not enough, and a general and vague claim that there is a concern of improper conduct in the account is not enough, but the bank must point to concrete acts and actions that may indicate the existence of a real concern. At the same time, I share the position that the bank should not conduct an investigation and not take excessively stringent enforcement actions, and that it should not be required to prove the matter at the level of proof required in civil law, i.e., the balance of probabilities, but at a lower level (which is somewhat consistent with the rule regarding the use of administrative evidence by the administrative authority for the purpose of making a decision within the scope of its discretion).( My emphases L.B.)