Local authorities will be allowed to pick the bank they want to work with.
Dexia Israel (Public Finance) Ltd. (TASE:DXIL) has lost its exclusivity to provide financing to local authorities through the state. Accountant General Shuki Oren decided not to hold a new tender for routing state grants to local authorities.
The agreement signed between Dexia (when it was Bank Otzar Hashilton Hamekomi) and the Ministry of Finance in December 1998 will expire at the end of this year. Oren reportedly wants to allow all local authorities to pick the bank they want to work with, including for the transfer of government grants.
Dexia Israel announced that the Accountant General's Office notified it yesterday that the agreement would expire at the end of 2008 and that no new tender would be held for the services that the bank provides under the agreement. Oren's decision hurts the bank, which until now the exclusive agent for handling financing agreements between the Ministry of Finance and local authorities.
Dexia Bank (Euronext: DEX) owns 65% of Dexia Israel.
Published by Globes [online], Israel business news - www.globes-online.com - on July 22, 2008
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