The incoming Minister of Finance ordered to distribute for public evaluation the draft regulation according to which the definition rate for a bank with a wide scope of activity will be reduced from 20% to 10%, a step that will in fact require Discount Bank to part with its holdings in
The incoming finance minister, Bezalel Smotrich, is expected to decide on the separation of the credit card company Cal from Discount. Smotrich ordered to circulate today (Monday) for public comment draft regulations to change the rate in the definition of a bank with a wide scope of activity.
As part of the regulations, it is proposed to state that the definition rate for a bank with a wide scope of activity will be reduced from 20% to 10%, a step that will actually oblige Discount Bank to part with its holdings in Cal. In addition, in accordance with the provisions of the law, within the framework of the regulations adjustments to the Hinoka protections were determined so that they would also apply in the separation of Cal from Discount.
The publication of the draft regulations for a public hearing was made following the recommendations of the Committee for Examining Competition in the Credit Market to the Minister of Finance on the matter.
Contrary to the position of the supervisor of banks Yair Avidan, the committee recommended that the minister exercise his authority according to the law and lower the threshold established by the law for the definition of “a bank with a wide scope of activity”, in a way that would oblige Discount Bank to part with its holdings in Cal. This is in light of the results of the separations that have already been carried out, assessments of the impact of the expected separation and the position that increasing the number of players in the market is expected to have a positive effect on the competition in the banking market, significantly. The committee believed that using the minister’s authority would increase competition and reduce centralization in the banking system, including in the consumer credit market.
Now, in light of the committee’s recommendations, the Minister of Finance requests to hear the public’s comments on the issue. During the public hearing period, the minister will also invite the representatives of Discount Bank to hear their position directly and directly, and then formulate his final decision in light of the committee’s recommendations, the bank’s position and the public’s comments.