A bank froze an account of a client after suspicion that the client extends services of checks clearance and over-the-counter loans without a license and money laundering activities.
The Court held that a bank may refuse to grant service only from reasonable reasons but may refuse service to a client upon suspicion of illegal activity or money laundering in the account. The directives of the Bank of Israel also require a bank to manage a computerized system to locate unusual activity in all its customers' accounts and to examine more intensively whether there is economic or business logic in account operations. In this case, there was concern that the customer was clearing checks and granting over-the-counter loans without a license, and therefore the bank was entitled to cease providing services to the customer.