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oversight independence

The Payment Systems Oversight Division carries out its duties independently in accordance with the Bank of Israel's policy, at the same time as working in collaboration with various parties within and outside the Bank of Israel.

The Bank of Israel’s functions in the financial sector are defined in the Bank of Israel Law, and include, among other things, regulating the economy’s payment systems so as to ensure their efficiency and stability. By virtue of this role, the Bank of Israel implements the role of payment systems oversight. However, in addition to this function, the central bank fulfills several roles:


- Payment systems operator - the central bank is the operator, owner, scheme manager and infrastructure of the Zahav (RTGS) system and the Checks Clearing House.

- Participant in some payment systems.

- Supervises some of the participants in the payment systems - the Banking Supervision Department

- Banker to the government - provides banking services to the government.

- Clearing institution - manager of current accounts and clearing accounts for financial entities.


While the fulfillment of a variety of roles by the central bank has significant advantages for a broad understanding of the field of payments, these roles may have quite different purposes, and the involvement of the Bank in the payments array from several different aspects may also raise concerns about conflicts of interest. The conflicts of interest may be expressed in the decision-making of management levels that are responsible for various functions at the same time and in the framework of the range of services provided by the Bank to all the functions at the same time such as computer services, personnel, and legal advice. The conflict of interest may also be reflected in the prioritization of tasks or in judgment. An example of such a concern is determining and implementing an oversight policy that benefits the Bank, as a participant or as a system operator.

The Bank of Israel considers it important to manage and handle any concern for a possible or perceived conflict of interest, and establishes policies and procedures aimed at ensuring that there aren’t conflicts of interest. The main way implemented in the Bank to prevent conflicts of interest is an organizational separation between the payment systems oversight function and units responsible for the other functions of the Bank. Within this framework, a departmental separation was made between the Payment Systems Oversight and the payment system operations function. This separation included a differentiated allocation of personnel, separation of powers between these functions and separation of access to the information bases. In addition, there is a direct reporting line between the Payment Systems Oversight Division and the Governor and the Deputy Governor, to allow the straightforward treatment of issues where there is a concern of a conflict of interest.

This page was last updated on: 17/11/2023