Elements for a Legal Definition of Commercial Banking: A Comparative View

Abstract

In 1941, the Banking Ordinance enacted by the High Commissioner of Palestine defined “banking business” as the “business of receiving from the public on current account money which is to be repayable on demand by check, and of making advances to customers”. The most recently enacted Israeli Banking Law (Licensing), 1981 contains a very extensive definition of banking business which includes no less than thirteen types of transactions.This certainly reflects a new legal approach towards the economic reality of banking which in and of itself has not changed drastically. Moreover, the peculiar dynamics of the banking business also inspired the legal rule that the Governor of the Bank of Israel should have the right to enlarge the legal definition by recognizing the banking character of other transactions.