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  • The Bank of Israel has been working in recent years to promote competition in Israel’s banking system, while safeguarding financial stability, fairness, and customer protection. As part of this effort, the Banking Supervision Department has led significant infrastructural reforms that have created conditions for the entry of new participants, including the establishment of two new banks for the first time in close to 40 years.
  • The impact of these measures to enhance competition in the banking system is already becoming evident. This is reflected in part in strong interest from domestic and international entities seeking to obtain a banking license, in the establishment of new banks, and in expanded access to payment systems. Examples of this include the approvals granted by the Governor of the Bank of Israel to Revolut Payments Israel Ltd. to proceed through the required stages of the banking license application process, and to Esh Israel Bank Ltd. to advance in the processes for access to and representation in the payment systems. These developments join One Zero Bank, which began providing services to the public about three years ago.

In recent years, the Bank of Israel has acted vigorously to promote competition in the banking system, while preserving system stability and ensuring fairness toward customers. Advancing infrastructural measures serves as the foundation for the entry of new entities into Israel’s banking system, increasing competition, and improving customer service.

The impact of these measures to enhance competition in the banking system is already becoming evident. Among other things, this is reflected in strong interest from domestic and international entities seeking to obtain a banking license, in the establishment of new banks, and in expanded access to payment systems. Examples of this include the approvals granted by the Governor of the Bank of Israel to Revolut Payments Israel Ltd. to proceed through the required stages of the banking license application process, and to Esh Israel Bank Ltd. to advance in the processes for access to and representation in the payment systems. These developments join One Zero Bank, which began providing services to the public about three years ago.

These processes have been made possible in part by complementary measures formulated by the Banking Supervision Department to remove regulatory and structural entry barriers for obtaining a banking license, thereby facilitating the entry of additional new participants. These measures were anchored in the Promotion of Competition in the Banking Market (Legislative Amendments) Law, 5786–2026, which for the first time establishes a legislative framework for micro and small banks. They will be accompanied by a graduated regulatory regime tailored to the size and complexity of the banking corporation’s activities, which will be published in the coming days.

This combination is expected to broaden the range of participants and products in the banking system, increase competition in the credit and deposit markets, and benefit households and small businesses—while preserving the stability of the banking system and maintaining public confidence in it.

A box to be published in the forthcoming Survey of Israel’s Banking System, and which accompanies this announcement (in Hebrew), provides further details on this reform, its objectives, and the means for its implementation in order to support the continued entry of new participants into the banking sector.