Bank of Israel outlines banking competition reforms including Revolut licensing progress and new micro and small bank framework

The Bank of Israel has outlined how reforms led by its Banking Supervision Department are opening Israel’s banking market to new entrants, highlighting approvals for Revolut Payments Israel Ltd. to proceed through the required stages of the banking license application process and for Esh Israel Bank Ltd. to advance in the processes for access to and representation in the payment systems. The update presents these steps as part of a broader effort to increase competition while maintaining financial stability, fairness, and customer protection. The measures include regulatory and structural changes intended to remove entry barriers for new banks. They have created conditions for the establishment of two new banks for the first time in close to 40 years, alongside expanded access to payment systems, and One Zero Bank began providing services to the public about three years ago. The reforms are 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. A graduated regulatory regime tailored to the size and complexity of a banking corporation’s activities will be published in the coming days. Further details are also set out in a box accompanying the announcement and due to appear in the forthcoming Survey of Israel’s Banking System.