The Bank of Israel outlined its final criteria for entities seeking to purchase the credit card operations of Bank Hapoalim BM and Bank Leumi le-Israel BM, indicating that financial or nonfinancial firms from abroad and private equity firms will be allowed to acquire the businesses.

The two banks are required by law to sell their credit card units by January 2020 or reduce their holdings to below 40%, in a bid to boost competition in Israel's banking sector.

In a Feb. 18 statement, the central bank said its main criteria for issuing a control permit to entities seeking to acquire the banks' credit card units include financial strength, relevant business experience in the merchant acquirer or financial institution fields, and lack of conflicting interests.

The regulator will also examine the investment strategies of the entities to ensure that they intend to play a major role as a merchant acquirer and credit institution in the Israeli market and to contribute to competition.

Bank of Israel Governor Karnit Flug said the separation of the credit card operations from the banks will also support efforts to improve Israel's banking sector, including establishing a central credit registry as well as a joint technology bureau, and introducing measures to ease the transition between banks.