Acting as the Banker of the Government

Pursuant to Section 48(a) of the Bank of Israel Law, 5770-2010 (hereinafter - the Bank of Israel Law): "The Bank shall be the sole banker of the Government for its banking activity in Israeli currency." Accordingly, the Government manages all of its local currency accounts and even some of its foreign currency accounts at the Bank of Israel. The Bank of Israel's Banking and Financial ​Services Unit provides the government ministries with the following banking services: execution of money transfers in all payment methods currently available in the economy and in a variety of currencies in Israel and around the world; interest calculations for its interest-bearing accounts; daily account statements; balance confirmations; and more.​   

Pursuant to Section 48(b) of the Law, the Government may, with the agreement of the Bank, "obtain certain services from Banking Corporations or Financial Entities, provided this be done only in order to manage the Government's debt and fiscal activity." The government manages domestic- and foreign-currency accounts for its budgetary and extra-budgetary activity in Israel and abroad, for financial transactions vis-a-vis the Bank of Israel, and for the financing of activity unrelated to the budget, with the Bank of Israel.   .   

Banker of the banks:

The banks deposit money with the Bank of Israel, in both domestic and foreign currency, in various types of deposits; some under the reserve requirements and some deposits of surplus cash made at the banks' own initiative in interest-bearing fixed-term deposits. The current accounts that the banks maintain with the Bank of Israel are used for liquidity management and for final settlement.   

In addition, the Bank of Israel provides banks with monetary loans by auction, discount-window ("overnight") loans, and settlement services for transactions that they conclude with each other using the "payment versus payment" method.

Banking of Financial Entities

Section 50 of the Bank of Israel Law provides as follows:

  1. The Bank may keep accounts for banking corporations and other financial entities, and, at the decision of the Governor, with the approval of the Committee, for central banks, monetary authorities and foreign banks, all subject to terms and conditions to be determined by the Governor, including the collection of management fees and commissions or other fees and commissions;
  2. An account at the Bank may be managed in Israeli currency or in foreign currency, as will be determined by the Governor.

Accordingly, the banking corporations manage deposits of various types in shekels and in foreign currency at the Bank of Israel. The current accounts of banking corporations at the Bank of Israel are used for both liquidity management and settlement purposes.

In addition, the Bank of Israel may provide banks with short-term monetary loans and deposits. For more information on the monetary tools of the Bank of Israel's Markets Department, please click here​.

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Questions and Answers

​According to the Bank of Israel Law, the following entities can open an account at the Bank of Israel:

1.The Government;
2. A "financial entity" as defined in the Bank of Israel Law, including a banking corporation;
3. Central Banks, Monetary Authorities and Foreign Banks, as decided by the Governor and with the approval of the Monetary Committee.

Customers and private entities in the State of Israel cannot maintain a bank account with the Bank of Israel.

The Banking and Financial Services Unit in the Bank of Israel Accounting Division manages activities in shekel and foreign currency accounts for the Government and its budgeted units, and provides banking services to the Government.

In addition, the banking corporations in Israel manage current accounts and loans and deposits of various types at the Bank of Israel - in shekels and in foreign currencies. Various financial entities also receive banking services from the Bank of Israel.

1. Current account management - ongoing management of banking activity in accounts, including monitoring and control;

2. Foreign currency transfers to beneficiaries in Israel and abroad;

3. Shekel transfers through the various clearinghouses;

4. Payments and receipts in shekels and foreign currency through physical checks;

5. The purchase and the sale of banknotes in shekels and foreign currency in cooperation with the Bank's Currency Department;

6. The production of daily account statements, balance confirmations and various reports;

7. Current and updated information through a designated computer system;

8. Interest rate calculations on customer balances.

​The unit provides banking services to central banks and to foreign financial entities in accordance with Section 50 of the Bank of Israel Law: "The Bank may maintain accounts for banking corporations and other financial entities, and, at the decision of the Governor, with the approval of the Committee, for central banks, monetary authorities and foreign banks, all under terms and conditions to be determined by the Governor, including the collection of management fees and commissions or other fees and commissions".​

​Similar to commercial banks in Israel, the Banking and Financial Services Unit represents the Bank of Israel and its customers as a participant in the payment and clearing systems in Israel. The following are the various types of the clearinghouses:

The “MASAV” Clearinghouse - an entity in which the nonpaper or cash interbank transactions are settled. Nonbank institutions and/or organizations also transfer authorized credit and debit instructions directly through “MASAV”. 

The Checks (Paper-Based) Clearinghouse - Most of the receivables (checks and credits and various debits and charges) presented by the banks in the Paper-Based Clearinghouse are checks, which are now presented only by electronic means. The clearinghouse also settles magnetized collection vouchers and nonmagnetized receivables (manual receivables). 

he “ZAHAV” Clearinghouse ​(Real-Time Gross Settlement - RTGS) – The “ZAHAV” Clearing House is a payment system that allows immediate and final transfer of funds between customers of banks and customers at other banks. In addition, the final settlement of all existing interbank payment systems, i.e.: the TASE Clearinghouse, “MASAV” and the Checks Clearinghouse is carried out in this system.

As the Bank of Israel's representative, the Banking and Financial Services Unit is responsible for settling payments on behalf of the Bank's customers and for settling the Bank's activities. It provides backing for the Bank's customers and divisions in the case of a state of emergency, and it participates in various interbank committees.​

I​n Israel, participants in the financial system are identified using an identification code that is unique for each participant (formerly known as a "bank code"). The identification code allows payment service providers to operate in the payment systems, and serves as part of their customers' account identification details for the purpose of making payments. As part of the process of opening the payment systems to nonbank participants, the Bank of Israel has decided that an identification code will be assigned to all bank and nonbank payment service providers who meet the necessary conditions so that all payment service providers will be identified in a uniform manner.

The Payment Systems Oversight Unit in conjunction with the Banking and Financial Services Unit are responsible for assigning identification codes.

For more information please click here​

One of the Bank of Israel's activities as a banker for the Government and other customers of the Bank is to perform risk management to address various operational and business risks. In recent years, there has been a trend of increased controls and regulations in the global financial system, which is reflected in more cases of inquiries and payment stoppages in global banking operations. Therefore, in order to ensure business continuity for the Bank's customers, the Banking and Financial Services Unit is required to implement a risk-based approach.

​Foreign Currency Banking Services:

Monday to Thursday - between the hours of 08:00 and 15:30; Friday, intermediate days of certain Jewish festivals and holiday eves - between the hours of 08:00 and 12:30; 

Email address: d-foreignTrade-hashavut@boi.gov.il.


Shekel Banking Services:

Sunday to Thursday - between the hours of 08:00 and 15:30;

Email address: gover_bank@boi.org.il​