Small banks, such as the Bank of Jerusalem, will be able to sell insurance policies forthwith, according to the recommendations of the Bachar committee, a Finance Ministry panel into reforms in the banking sector. The panel submitted its findings to the treasury last week, although it did not release its recommendations to the public.
The sale of insurance products is seen as a trade-off for the banks, in return for their selling off all concerns in mutual and provident funds, a sector dominated by the country's two largest banks, Hapoalim and Leumi. These two, according to the panel, will have to sell off their provident and mutual funds and dilute their insurance company holdings (in Clal and Migdal, respectively) to 5 percent before they are allowed to sell insurance and pension policies.
Medium-sized banks, such as Union, First International and Mizrahi, need only divest themselves of their provident funds to be allowed to sell insurance. With respect to Israel Discount Bank, the Bachar panel decided that it should sell its provident funds, and reduce its holding in Harel Insurance to 5 percent but it will not be required to sell its mutual funds immediately.
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