The Payment Systems Oversight Unit's authorities in legislation

 

Bank of Israel Law, 5770–2010

Section 4 of the Bank of Israel Law sets out that one of the Bank of Israel’s functions is “Regulating the economy’s payment and clearing systems so as to ensure their efficiency and stability, including their conformity with the Payment Systems Law, 5768-2008.”  This provision is the source of the Bank of Israel’s authority to operate in the area of payment systems in general, and in the area of payment systems supervision in particular.

 

 

Payment Systems Law, 5768–2008

The Law provides the Bank of Israel with various tools in order to implement supervisory authority over the payment systems.  These tools include the following:

  • Demanding information: The Bank of Israel is permitted to demand information and documents from a payment system operator or from a payment system participant in order to implement the provisions of the Payment Systems Law.
  • Demand to fulfill obligations: If an operator of a controlled system does not fulfill the obligations imposed on it, the Bank of Israel is permitted to instruct it to fulfill those obligations in the manner and within the timeframe that the Bank views as proper. In part, the Bank of Israel is permitted to instruct the operator of a controlled system to enact or change rules or to operate a system in accordance with the provisions of the Law.
  • Enacting regulations: If an operator of a controlled system does not fulfill a directive issued to it by the Bank of Israel Governor to enact or change rules, the Governor is permitted to enact or change them on his own.

  • Monetary sanction due to contravention of a directive: The Bank of Israel Governor is permitted to impose a monetary sanction on the operator of a payment system, in each of the following cases:

    • When the system operator does not provide the Governor or another authorized official with information required in order to declare the system as a controlled or designated controlled system.
    • When the system operator contravenes a demand to fulfill its obligations or a regulation as described above.
    • When a system operator does not provide information necessary for the execution of the provisions of the Law.
  • Monetary sanction due to nonprovision of information: If an operator of a payment system is required to provide the Governor or another authorized official with information necessary for statistical purposes and does not do so, the Bank of Israel is permitted to impose a monetary sanction.

 

 

Other relevant laws:

Banking (Licensing) Law, 5741–1981

Increasing Competition and Reducing Concentration in the Banking Industry Law (Legislative Amendments), 5777–2017

Supervision of Financial Services (Regulated Financial Services) Law, 5776–2016

Payment Services Law, 5779–2019

Payment Cards Law, 5746–1986

Payment Services Directive (PSD2) – European Union, 2015/2366

 

Relevant banking legislation (banking circulars, procedures, and explanatory notes)

Increasing Competition and Reducing Concentration in the Banking Industry Law (Legislative Amendments), 5777–2017

 

 

The most up-to-date version of the text of Israeli legislation is on the Reshumot website at the Ministry of Justice.

This page was last updated on: 22/05/2024