JERUSALEM: An Israeli ministerial committee gave the green light on Sunday to Finance Ministry-led banking reforms aimed at boosting competition and lowering interest rates for households and businesses.
Finance Minister Bezalel Smotrich has been a frequent critic of commercial banks, accusing lenders of exploiting customers in the wake of a spike in interest rates over the past few years
Banks will also have to pay a 15% tax on excess profits under a previously announced law.
On Sunday, the Ministerial Committee for Legislation approved the banking services competition reform that the ministry said is another step in fighting the high cost of living.
The reform aims to foster new entities that will be able to operate as banks and offer the public higher interest rates on deposits and on funds held in checking accounts. It also aims to encourage new banks that will specialize in providing credit to small and medium-sized businesses and households, offering loans at lower interest rates.
The banking reform plan will be part of the 2026 state budget plan that still awaits parliamentary approval.
Separately, the cabinet approved the appointment of two senior Finance Ministry officials.
Michal Abadi-Boiangiu was named accountant general to replace Yali Rothenberg whose term is ending in January. Her term begins February 1 and will be her second stint in the post, having served between 2011 and 2017.
Maharan Frozenfar, a brigadier general, was approved as budget director. Frozenfar served as financial adviser to the military's chief of staff and as head of the Defence Ministry's budget department. His term is expected to begin this week.
(Reporting by Steven Scheer; Editing by David Holmes)
