Check Point Software Technologies Ltd. (Nasdaq: CHKP) cofounder and chairperson Marius Nacht and Delek USA CEO Ezra Uzi Yemin are promoting a venture for founding a digital bank and are holding talks with the Bank of Israel Banking Supervision Department. Following initial talks with the department, they have begun formulating a detailed business plan, a process likely to take 3-6 months. After that, the bank is meant to be set up and to obtain final regulatory approval for starting operations, a process that could take another year or more. This means that if all goes as planned, the bank will begin operating in two years' time.
Nacht and Yemin are very liquid businesspeople who will have no trouble meeting the Bank of Israel's NIS 50 million capital requirement. They plan to invest $60 million and raise a similar amount on the stock exchange or from private investors.
Numerous regulatory obstacles, however, stand in the way of founding a digital bank. Nacht and Yemin are demanding a number of regulatory changes as conditions for commencing activity. The most important is settling the question of deposit insurance. The Strum committee recommended introducing it, but as far as is known no progress has been made, while the Ministry of Finance is in no hurry to proceed on the matter. It is not clear whether the prospective venture will cause a change in attitude.
Two other conditions posed by Nacht and Yemin are the establishment of a service bureau - an external agency providing computer services to banking entities and credit associations, designed to lower the cost of computer services. The Ministry of Finance has started to make progress on this, and has published a tender, but this complicated measure is only in the initial stages. It is very doubtful whether such a service bureau will be up and running within a year.
A third question is the introduction of the API standard designed to provide access to the banks' closed databases, thereby bolstering competition in the banking system. Both the Ministry of Finance and the Bank of Israel are behind this project, but implementing it is difficult.
Nacht and Yemin have hired former Supervisor of Banks David Zaken as a financial advisor for founding the digital bank. Zaken wrote the regulations for founding a digital bank in Israel. The group is also currently looking for a CEO for the bank.
Nacht's wealth is estimated at $2 billion. Yemin, also a very wealthy man, began his career in the public sector, working in insurance at the Ministry of Finance. He joined Delek Group, controlled by Yitzhak Tshuva, in late 2000 as the group's CFO and was sent by Tshuva to the US to found the group's energy activity there.
Another concern considering the founding of a digital bank is the Israel Free Loan Association (IFLA), which is already active and is holding talks with the Bank of Israel in order to expand its business and obtain a bank license.
Marius Nacht is the ex-husband of Anat Agmon, one of the controlling shareholders in "Globes."
Published by Globes [online], Israel business news - www.globes-online.com - on May 21, 2018
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