Monday . 12 January . 2026
Breaking Update

Israel’s Banking Competition Reform Moves Forward

Israel's banking competition reform, designed to lower interest rates for SMEs and households, advances with legislative committee approval. This key initiative.

Gil TanenbaumBusiness

Jerusalem, 12 January, 2026 (TPS-IL) — 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 and households. The reform, led by the Ministry of Finance, will improve credit conditions and financial services and is a key component in the fight against the cost of living.

The reform will enable several dramatic steps:

– Competition in deposits: Introducing new entities that can be banks and offer the public higher interest rates on deposits and money in savings accounts.

– Easing credit 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 will be able to compete with existing banks in offering deposits to the public, and will also be able to provide cheaper credit based on those deposits. Thus, the reform also constitutes a central component in the fight against the cost of living, and will also help small and medium-sized businesses operate and grow through cheaper and more convenient financing.

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Gil Tanenbaum
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