15 billion at stake: Israel's banks await new legal blow
The Central District Court of Israel has approved a class action lawsuit against the country's four largest banks for 15 billion shekels. The plaintiffs allege that the banks failed to pay interest on current account balances for years, profiting from these funds. Judge Shmuel Bornstein approved the case on grounds of unjust enrichment.
The Central District Court of Israel has authorized a class action lawsuit against the country's four largest banks — Leumi, Mizrahi-Tefahot, Discount, and First International — for 15 billion shekels. The plaintiffs claim that the banks paid virtually no interest on positive current account balances for years, earning profits from these funds. The claim emerged against the backdrop of a sharp rise in interest rates in Israel after 2022: loans and mortgages became more expensive, deposit yields increased, but money in current accounts yielded almost nothing. According to the Bank of Israel, the average interest rate on balances was about 0.1%, while short-term deposit yields were around 4% in early 2025. Israelis hold about 400 billion shekels in current accounts, of which about 236 billion belong to households and small businesses. In 2025, banks earned about 430 shekels per 10,000 shekels of client balances, while clients received only about 10 shekels. Judge Shmuel Bornstein approved the case on grounds of unjust enrichment, but did not approve other claims. The lawsuit covers the period from April 2022 to May 20, 2025. The banks argue that the contract does not obligate them to pay interest on any amount and that the funds remain fully accessible. The banks are expected to appeal the decision to the Supreme Court.