February 18, 2018 / 11:07 AM / 3 months ago

Israel regulator issues rules for acquiring credit card firms

JERUSALEM, Feb 18 (Reuters) - Israel’s banking regulator on Sunday published its final criteria for foreign and domestic entities seeking to buy credit card companies from banks that must divest them as part of a bid to boost competition.

Israel’s top banks Hapoalim and Leumi are required by law to sell their credit card companies by 2020 or reduce their holdings to below 40 percent if the companies are issued on the stock exchange.

The central bank said its criteria for issuing a permit to buy a credit card firm include aspects of honesty and integrity, financial strength, relevant business experience in the merchant acquirer or financial institution fields, and lack of conflicting interests.

The investment strategies of entities wishing to purchase the companies will be examined to ascertain they intend to play a major role as a merchant acquirer and credit institution in Israel and contribute to competition, the central bank said.

“The separation of the credit card companies from the banks is a main component of the measures to increase competition in banking, alongside other structural and infrastructural changes that we are advancing in Israel,” Bank of Israel Governor Karnit Flug said in a statement. (Reporting by Steven Scheer; Editing by Tova Cohen)

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