JERUSALEM, Dec. 25 (Xinhua) -- Israel's banking regulator on Sunday approved the establishment of a new digital bank, Esh Bank Israel, in a rare move in the country's highly concentrated banking sector.

The Bank of Israel, Israel's central bank, said in a statement that the license was granted to a group of Israeli entrepreneurs after its supervision department completed an inspection of Esh Bank Israel.

The central bank said that it will allow the founders to complete the necessary preparations, including the development and testing of new technology, and hiring a management team and bank staff, in order to begin operations.

The Bank of Israel estimated that it will take about a year and a half for Esh Bank Israel to become fully operational.

"There's a long way ahead of us," Shmuel Hauser, former chairman of the Israel Securities Authority and the chairman of the Esh Bank Israel, said in the statement, adding the new bank will offer "attractive returns, fee-free services, no subscription fees, and no advance conditions such as salary transfer."

Amir Yaron, the governor of the Bank of Israel, said that the central bank sees "great importance in the entry of banks and other new players into the banking system in Israel so that they would contribute to increasing competition and innovation in the financial system."

The Esh Bank Israel is the second addition to the country's banking system in 43 years. In August, One Zero, a digital bank that received its license three years ago, was officially launched and became fully operational.

Most of Israel's banking sector is controlled by a few big banks. Enditem

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