Bank of Israel grants Revolut conditional license to launch new digital bank

The Bank of Israel issued a conditional license to London-based fintech company Revolut on Tuesday, allowing it to establish a new digital bank in the country.

Bank of Israel Governor Amir Yaron and Supervisor of Banks Daniel Hahiashvili confirmed that the new lender will be named Bank Revolut Israel. Yaron stated that the approval represents the initial phase of the founding process, with the central bank providing guidance as the company completes remaining operational requirements. He noted that the central bank has worked for years to reduce entry barriers to bring additional players into the sector.

This approval is the third banking license granted by the Bank of Israel since December 2019. The move targets a banking sector dominated by five major institutions. Regulators and policymakers have long criticized these dominant banks for charging high fees and for being slow to raise interest rates on customer deposits and savings accounts.

Finance Minister Bezalel Smotrich described the approval as a result of the "small banks" reform, a component of the latest Economic Arrangements Law. Smotrich said that breaking down market concentration is a fundamental principle of the government's economic policy. He added that an open economy attracts international players who bring innovation and lower prices to citizens.

Revolut, which was founded in 2015 and serves more than 80 million customers globally, has expanded aggressively in 2026. The company, valued at $115 billion, launched banks in the United Kingdom, Mexico, Australia, and New Zealand this year. It also secured banking licenses in France, Colombia, and Argentina. The firm operates without physical branches and offers digital services including payments, currency exchange, credit, and deposit products, though it has not yet specified which services it will offer in Israel.

Uri Nathan, the former CEO of Pepper, which is the digital banking platform of Bank Leumi, will serve as the CEO of Bank Revolut Israel. Shmuel Ben Zvi will serve as chairman. Nathan said the company aims to create genuine competition through a digital financial services platform and looks forward to serving the Israeli public.

The new bank follows One Zero Digital Bank Ltd., which launched in early 2023 as the nation's first new bank in over 40 years. Esh Bank Israel Ltd., the country's second digital bank, received a full license in 2024. Esh Bank has operated in pilot mode for two years and its planned public launch in 2026 appears to be delayed.