The Israeli cabinet has given the go-ahead to the legislation that aims to boost competition in the country’s financial sector by allowing new players to enter the market.
The new legislation will force the country’s two biggest banks- Hapoalim and Leumi- to divest their credit-card companies. However, the banks will still be allowed to issue credit cards.
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The new legislation will also offer incentives for new players to ease the process of their entry into the country’s financial arena.
Bank of Israel Governor Karnit Flug said that she supported the reforms but warned the government to implement the changes with caution.
"More banks and more small banks and more financial brokers that are not banks mean a higher risk of collapse," she said.
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