The law essentially eliminates the need for a physical check once it is completed and signed by the payer. The physical check will be needed neither for the banks’ clearing process nor for legal collection, enforcement and proceedings. Pursuant to the new law, scanned copies of checks, once certain conditions are met, are admissible in court. The law will enter into force in approximately six months, and within two years, clearing of checks between banks will only be processed through such scanned copies. Source: Bank of Israel (press release, in Hebrew).
Israeli Electronic Check Clearing Law Enacted
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According to the Electronic Clearing of Checks Law, 5776-2016 enacted last week by the Knesset (the Israeli parliament), bank customers will no longer be required to physically provide to their bank checks they wish to deposit: it will suffice to submit scanned copies of checks, by electronically scanning them with a smartphone or computer and sending the scanned file to the bank. The purpose of the law is to streamline and reduce the costs of the clearing process for checks, to regulate the admissibility of digitally scanned checks as evidence in legal proceedings, expedite the clearing process and regulate the return of checks that are not honored (‘bounced checks’).