The battle will reach the court: four of the five largest banks appealed their designation as a concentration group
Four of Israel's five largest banks have filed an appeal with the Competition Tribunal, challenging the Competition Authority's decision to designate them as a concentration group. The banks argue that the regulator's intervention contradicts the Bank of Israel's position and could harm customers.
The struggle between the banking system and the Competition Authority is reaching the courts. Today, on the final day for filing appeals after several extensions, four of the five largest banks — Hapoalim, Mizrahi Tefahot, Discount, and Beinleumi — filed an appeal to the Competition Tribunal against the decision to declare them a concentration group in the field of retail services. Bank Leumi refused to respond to an inquiry on the matter, but it is likely that the bank intends to file an appeal and requested an additional extension to do so.
The current move follows a prolonged process that began in March 2024, when the Competition Authority opened an investigation and summoned the banks to a hearing following sharp interest rate gaps in current accounts and deposits compared to credit, which yielded record profits for the banks. In May of this year, the Commissioner of Competition, Michal Cohen, declared the five banks a concentration group and published four operational directives intended to take effect in May 2027.
The directives focus on the following measures:
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Prohibiting price discrimination and the provision of preferential interest rates to negotiating customers.
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Increasing transparency and making information on deposits and money market funds accessible at decision points.
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Facilitating the transfer of deposits between banks.
The filing of the appeal is expected to delay the entry into force of the directives. At the center of the appeals filed today is the claim of lack of authority of the Competition Authority, alongside the claim that competition exists in the market and that the Authority's intervention is being carried out in complete contradiction to the position of the industry's designated regulator — the Bank of Israel. They further argue that this intervention could disrupt existing mechanisms and harm customers.
"This declaration is an extreme, disproportionate, and purely declarative step," the Bank of Israel previously stated regarding the Authority's decision.
Therefore, the Competition Tribunal's ruling will determine not only whether the operational directives will take effect, but will also redraw the boundaries of jurisdiction and authority between the Competition Authority and the Banking Supervision Department.
