Bank charges will drop by June 2008 in the new bank fee reform by the Bank of Israel. The cost and number of transaction fees will be reduced, according to Banking Supervisor Ron Hizkiyahu, who released a draft of the new fee schedule on Wednesday.

One of the initiatives involves the number of fees charged for customers' current accounts. The new schedule will pare down 15 different types of fees into just two categories: direct transactions through the internet, telephone or ATMs, and transactions carried out with a live clerk inside the bank.

It is expected that the reform will spark higher competition between banking institutions. "Customers will be able to compare which bank is cheaper in operating current accounts, according to only two types of fees," said Hizkiyahu.