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December sees 18% drop in ATM withdrawals
Bank of Israel reports sharp rise in number of bankruptcy files, bad checks and restricted accounts in 2008 compared to previous year, while Israelis withdraw less cash from automated teller machines
Recession in Israel is deepening, and can be seen in the way Israelis spend their money. In December and January a sharp drop in cash withdrawals from automated teller machine's was noted, alongside a rise in the issuing of dishonored checks and the number of restricted bank accounts.
The number of bankruptcies in 2008 rose almost 40% compared to 2007. At the end of the year the number of bankruptcies in Israel was 50% higher than the same period in 2007. At the end of 2008, the official receiver handled 14,400 bankruptcy cases compared to over 10,000 last year.
Data from the Bank of Israel, commercial banks, and the Trade and Justice ministries show a bleak picture of trends in the Israeli market in the past few months. A deepening in recession led the Bank of Israel to cut its growth forecast, and the Finance Ministry is expected to follow suit.
In December 2008, an 18% drop was noted in the public's cash withdrawal from automated teller machines, compared to December 2007. The average sum of money withdrawn in December was NIS 500 ($120), compared to NIS 600 ($145) last year and NIS 550 ($133) in July and August of 2008.
The total value of checks used in payments in 2008 also declined, and amounted to some NIS 80 billion (about $19 billion) down from NIS 88 billion ($21 billion) in 2007. A particularly sharp drop of about 23% was noted in November and December.
An 18% rise in the number of dishonored checks was noted in November and December of 2008 compared to the same period last year. An average 183,000 checks were bounced each month compared to an average of 155,000 each month for the same period in 2007.
In 2008 the number of restricted bank accounts in Israel rose, due to the bouncing of over ten checks per customer, by an unprecedented 10%. In the end of 2008 there were over 190,000 restricted bank accounts belonging to some 110,000 customers, compared to 171,000 restricted accounts by the end of 2007.
Only 4% of the restricted accounts belonged to companies, and the rest belonged to private customers. Some 35% of the accounts were restricted under harsh circumstances, after their owners gave out bad checks even after having their accounts blocked by the bank.
