The Ministerial Committee for Legislation approved the banking services competition reform, which aims to increase competition in the banking system and lower Interest Rates for small and medium-sized businesses as well as households. The reform, led by the Ministry of Finance, will improve credit conditions and financial services and is a central component in the fight against the high Cost of Living.
The reform will enable several dramatic steps:
– Competition in Deposits: The entry of new entities that can become banks and offer the public higher interest rates on deposits and on current account funds.
– Credit Easing for Small and Medium-Sized Businesses and Households: Encouraging the establishment of new banks that will specialize in credit for small and medium-sized businesses and households, and will offer credit at lower interest rates.
– Dual Solution: Encouraging the establishment of new banks that can compete with existing banks by offering deposits to the public, and can also provide cheaper credit based on those deposits. Thus, the reform is both a central component in the fight against the high Cost of Living, and will help small and medium-sized businesses operate and grow through cheaper and more convenient financing.
In fact, the reform will allow the entry of new banking players from Israel and abroad, who will bring with them competition that will lower the cost of money for businesses, households, and the economy as a whole, as well as financial innovation, advanced products, and diverse offerings, while improving service quality and its adaptation to public needs.
The Ministerial Committee for Legislative Amendments approved the advancement of the law following the government’s decision to adopt it as part of the Arrangements Law. Legislative proceedings will begin with the expected submission of the state budget to the Knesset this week.