Bank of Israel gives Revolut a conditional license to open a new bank

Israel's central bank has granted Revolut, the UK-based financial technology company, a conditional license to set up a new bank in the country, The Times of Israel reported. The planned institution is to operate under the name Revolut Bank Israel.

The approval is not yet permission to serve customers. According to The Times of Israel, it clears an initial hurdle and lets the company proceed with the operational, technical and regulatory work it must finish before the bank can open. The business daily Globes reported that two earlier digital banks, One Zero and Esh, came before Revolut, making it the third company cleared by the central bank to run a bank of this kind.

What the governor said

Bank of Israel Governor Amir Yaron described the decision as "a first step toward founding the new bank" and said Revolut would complete the remaining process with guidance from the central bank, according to The Times of Israel. He tied the move to the regulator's wider policy on competition, saying that bringing new players into the sector is "the main path to increasing competition" and that the bank had worked over the years to lower the barriers facing newcomers.

What the Bank of Israel is and why its approval matters

The Bank of Israel is the country's central bank. Besides setting monetary policy, it supervises the commercial banks operating in Israel and decides who may open one. A company that wants to take deposits and offer banking services to the Israeli public needs its license, which is why the regulator's sign-off is the gating step for any new entrant.

A conditional license, as described in the reports, sits between an application and a fully operating bank. It signals that the regulator is prepared to let the project go ahead, while leaving the applicant to meet a set of requirements before it can begin serving the public. The reports do not list those conditions.

A concentrated banking market

The Times of Israel characterised Israel's banking sector as highly concentrated and said this licence forms part of the central bank's effort to increase competition within it. Governor Yaron's comments point the same way: in his account, the regulator's preferred route to more competition is admitting additional banks rather than reshaping the existing ones.

Revolut's licence is the third issued for a new bank since December 2019, The Times of Israel reported. Globes named the two earlier recipients as One Zero and Esh, both of which it described as digital banks.

Who Revolut is

Globes described Revolut as a UK international fintech giant, and The Times of Israel called it a global fintech giant preparing to enter the Israeli banking market. Fintech, short for financial technology, refers to companies that deliver banking and payment services mainly through apps and online platforms rather than branch networks. The significance of this step is that the company is now seeking to become a licensed bank inside Israel, under the supervision of the Israeli central bank.

How the two reports compare

The two reports agree on the core facts: the Bank of Israel has approved a licence for Revolut, and it is the third such approval in the recent wave of new banks. They differ in emphasis. The Times of Israel describes the licence as conditional and stresses the steps still ahead, while the Globes report, as published, speaks of Revolut being awarded a licence to set up a bank, without using the word conditional. The governor's own description of the decision as a first step is consistent with the conditional framing.

What the reports do not say

Neither report gives a timeline for when Revolut Bank Israel might begin accepting customers, or what specific conditions it must meet before then. No comment from Revolut itself is included in either account, and the reports do not say what products the bank intends to offer, how much capital it will commit, or how the existing Israeli banks responded to the decision.