The Bank of Israel today published the final document setting forth the criteria for acquiring a credit card company or holding a clearance license. The Bank of Israel stated that it would allow investment funds to acquire Isracard and Leumi Card. It will also allow overseas financial and non-financial concerns to acquire the companies on condition that they comply with the Promotion of Competition and Reduction of Concentration Law.
The Bank of Israel will allow foreign funds to acquire control of one of the credit card companies, but is making this contingent on the fund possessing a similar license in a developed country. "The fund must have a permit from an OECD country to control a financial concern," the document states.
The document also sets tougher conditions for the controlling interest in credit card companies - a 30% share, compared with the previously published 20% requirement, so that the controlling core will be more stable. On the other hand, the Bank of Israel is softening the examination of financial soundness for a holding in shares beyond the controlling core requirement.
The Bank of Israel says that the main criteria for allowing control include honesty and integrity, financial soundness, relevant business experience in clearance and finances, and an absence of conflicts of interest. "In addition, the investment strategies of the concerns seeking to acquire the companies will be examined in order to make sure that the concerns plan on being a significant factor in the clearance and credit market in Israel, and on contributing to competition in the financial sector," the Bank of Israel writes, thereby hinting that it would like to the credit card companies turn into banks.
Following the announcement, Supervisor of Banks Hedva Ber said today, "Today, we have advanced another stage in implementation of the reform for promoting competition. The meetings we are holding with potential buyers for the credit card companies and investment houses clearly show their need for regulatory certainty, and we will therefore ensure that the regulatory environment is as supportive as possible, so that the credit card companies are acquired by serious concerns, and can achieve the goals of the reform."
Published by Globes [online], Israel Business News - www.globes-online.com - on February 18, 2018
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