Israel Grants First Banking License to International Firm Revolut
Translated & summarized from Davar by baba
The Bank of Israel has granted a conditional license to the international financial firm Revolut to establish a new bank in Israel, marking the first time a foreign company has received such approval. Governor Amir Yaron stated the move aims to increase competition in the concentrated banking sector, where a few large banks dominate. Revolut must complete regulatory and operational preparations before the license conditions are lifted. The bank's chairman, Shmuel Ben Zvi, expressed confidence in adapting Revolut's global services for the Israeli market.
The story in 5 lines · by baba
- Israel's Bank of Israel granted a conditional banking license to international firm Revolut.
- This is the first time a foreign company has received a license to establish a bank in Israel.
- The move aims to increase competition in Israel's highly concentrated banking sector.
- Revolut must meet regulatory, technological, and operational requirements before full approval.
- Bank of Israel Governor Amir Yaron has been seeking new players to boost competition since 2022.
The Bank of Israel, led by Governor Prof. Amir Yaron, announced Tuesday the conditional approval for the establishment of a new bank, "Revolut Bank Israel (in formation)," by the global Revolut group. This marks the first time an international company has received a license to establish a bank in Israel. The license was granted to Nikolai Storonsky, the controlling shareholder of the international company, and includes authorization for him to control it.
This is the third banking license issued in Israel since 2019, following a 40-year period with no new banks established. Governor Yaron has been actively working since 2022 to diversify Israel's concentrated banking sector, where the five largest banks control approximately 99% of the market's assets. This lack of competition has contributed to a significant increase in bank profits, which reached about NIS 32 billion last year, partly due to high interest rate differentials.
Revolut, a financial company operating in 40 countries, will need to complete regulatory, technological, and operational preparations. The Bank of Israel's banking supervision department will continue to oversee the bank's establishment and will lift the conditions on the license once these requirements are met. Governor Yaron recalled meeting with Revolut's leadership in London in late 2022 to encourage their entry into the Israeli market, viewing the current license as a culmination of those efforts.
"The main way to increase competition is by bringing in new players," Yaron stated, adding that the Bank of Israel has been working to lower entry barriers for such companies. He also revealed that the Bank of Israel is engaged in similar processes with other companies. Dr. Shmuel (Muli) Ben Zvi, Chairman of Revolut Israel, expressed gratitude to the Bank of Israel for its professional guidance and stated that Revolut plans to leverage its international experience and innovation, adapting them to the Israeli market to offer significant value to local customers.
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