Post Bank Faces Backlash as it Raises Basic Service Rates by 50%

The Post Bank has announced a substantial increase of approximately 50% in rates for essential services, leaving its half a million customers, primarily comprised of a vulnerable population, grappling with limited choices.

Originally established as a social bank, the Post Bank catered to the needs of the weak and underserved, providing basic services either for free or at nominal prices. However, a recent decree from the bank has imposed higher charges on fundamental services such as bill payments, check and cash deposits, and account management.

Unlike commercial banks that offer customers the flexibility to negotiate fees or seek better conditions elsewhere, the customers of Post Bank find themselves without alternatives. The recent closure of post offices, justified by cost-cutting measures and privatization efforts, further exacerbated the challenges faced by populations reliant on in-person services.

A year ago, in January 2023, the Post Bank initiated rate hikes, with fees for bill payments and depositing cash or checks rising significantly. The latest round of increases sees account management fees surging by 50%, now standing at NIS 6.90. Additionally, bill payment fees have also jumped by 50%, reaching NIS 3 per transaction.

The Israel Post defended the move, citing the operation of a network of 400 branches nationwide, coupled with a decline in postal service usage and customer traffic, as necessitating adjustments to certain service charges. However, the new price list is yet to be finalized.

The decision to raise rates comes amid concerns about reduced accessibility due to the closure of post offices, impacting populations that rely on face-to-face interactions. This compounds the financial burden on customers who were initially drawn to the Post Bank for its commitment to providing affordable services.

The Israel Post stated, "In the past year, we have expanded digital operations and offered discounts to many customers. While we acknowledge the decrease in the use of postal services, we remain committed to subsidizing over 50% of the costs of Post Bank services for pension-supported populations."

As customers voice their discontent, the Post Bank now finds itself at the center of a growing controversy over its shift from a socially oriented institution to one that appears to prioritize financial considerations over the needs of its vulnerable clientele.