The two largest Israeli banks, Leumi and Hapoalim, have requested to be allowed to participate in the state tender to integrate the services of the Postal Bank into the commercial banking sector.

A month ago, treasury accountant general Yaron Zelekha sent letters to dozens of institutions that may be interested in buying the Postal Bank. Among the local bodies Zelekha approached were insurance companies and the medium-sized banks.

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However, the accountant general did not send letters to Hapoalim and Leumi, since they hold the greatest concentration of power in the Israeli banking industry - one of the main reasons the Postal Bank is moving into commercial territory.

But the two banks have refused to accept Zelekha's verdict, and consider themselves the subject of discrimination. As a result, they recently sent representatives to Zelekha to request tender documents.

A month ago, a joint team from the Israel Post and the treasury started examining the option of allowing a financial institution to use the Postal Bank's network of branches to sell its products and services. The partner could be an Israeli insurance company or medium-sized bank, or an international financial body or foreign postal bank. Another possibility is turning the new postal company into a completely commercial bank that operates with an official license and is subject to Bank of Israel supervision.

The team is supposed to finish its work and decide which model is preferable by the end of March 2007. In January, team members are scheduled to travel to visit various foreign institutions that have shown interest in working with the Postal Bank.

The plan received support from a foreign source yesterday, as the chairman of the Supervisory Board of the German Postbank, Dr. Klaus Zumwinkel, arrived in Israel and met with Finance Minister Abraham Hirchson and the Bank of Israel head Stanley Fischer. Zumwinkel explained the German Postbank model to them and to outgoing banks supervisor Yoav Lehman, who also attended the meeting. The possibility of cooperation was raised.