Rachel runs a small business in Israel. Not a unicorn. Not a “startup.” A real small business, the kind where you still know the names of your regulars and you can tell who’s calling by the way they sigh into the phone.

She lives in an apartment in Rishon LeZion with three kids and exactly one modest wish: to go one full week without opening her bank app and feeling personally offended.

She has a mortgage from 2016, back when the bank smiled at her like they were dating. “Congratulations,” they told her. “You’re building a future.” They handed her coffee in a paper cup, the kind that tastes like optimism and printer ink, and she signed papers so thick they could’ve stopped a small missile. She walked out thinking, okay, this is adulthood. This is stability.

Then 2020 happened. COVID hit, the world got weird, customers disappeared, and Rachel took a business loan. Not because she wanted a new Mercedes. Because she wanted her business to keep breathing. The bank was suddenly less romantic. Same building, different mood. In 2016 they were her partner. In 2020 they were her landlord, and she was late on rent.

Now it’s 2026, and the main relationship in Rachel’s life isn’t with her husband or even her kids. It’s with the interest rate.

Every month, her mortgage payment shows up like a surprise guest who eats everything in the fridge and then complains there’s no dessert. And the business loan? That one has the personality of a WhatsApp group admin. Very active, always sending reminders, never asking how she’s doing.

What makes Rachel call the banks thieves isn’t even that they want their money back. Fine. Loans aren’t gifts. But the way they do it feels like a magic trick where her wallet is the rabbit, and the rabbit never comes back.

When interest rates went up, the banks didn’t “adjust.” They pounced. Borrowing got expensive fast: mortgages, overdrafts, business loans, anything that touches regular people trying to pay for regular life. The bank app doesn’t say “pounced,” obviously. It says “updated pricing.” Very polite language for “we saw your vulnerability and we turned it into a revenue stream.”

But when it came to what banks pay savers on deposits? Suddenly they developed a deep love for patience. They became spiritual. “Wait,” they whispered, like it’s mindfulness. Like Rachel isn’t watching them charge her interest in real time while paying her savings account the financial equivalent of a pity emoji.

That gap, the space between what they charge and what they pay, is where the robbery feeling lives. It’s the part where Rachel realizes the bank isn’t a service. It’s a toll road, and it owns the only bridge.

In 2024, banks in Israel made about NIS 29.7 billion in net profit, with a 15.9% return on equity. Those numbers floated around while people like Rachel were doing math on the back of supermarket receipts. Not big math. Sad math. The kind where you circle the expensive yogurt and put it back.

And then, suddenly, the government discovered banks exist.

Because banks made a fortune while everyone suffers!

Because banks made a fortune while everyone suffers!

In March 2024, Israel approved an extra 6% tax on banks’ domestic profits for 2024–2025, expected to raise about NIS 2.5 billion. They explained it with the war budget and the fact that profits had surged. Which, yes. When the house is on fire, you look for money. But it was also politics. Because “banks made a fortune while everyone suffers” is the kind of sentence that wins arguments in the Knesset and in the line at Super-Pharm.

Still, the banks kept printing money like they had a personal deal with the universe.

Like the government was saying: normal profit is fine, but if you’re making cartoon-villain profit, we want a cut.

Like the government was saying: normal profit is fine, but if you’re making cartoon-villain profit, we want a cut.

Then in December 2025 the Finance Ministry came with the serious threat: a 15% “excess profits” tax for five years. Not just “higher tax,” but a special tax aimed at profits above a trigger, defined as more than 50% above the bank’s average annual profit in 2018–2022. Like the government was saying: normal profit is fine, but if you’re making cartoon-villain profit, we want a cut.

Rachel almost admired the concept. As a small business owner, she’s never had “excess profit.” She’s had “profit that disappears when the VAT payment hits.” She’s had “profit that turns into a broken refrigerator.” She’s had “profit” in quotation marks.

The five-year plan was expected to bring in around NIS 7.5 billion total, about NIS 1.5 billion a year. That’s not a symbolic slap. That’s a “sit down, we need to talk” number.

And then March 2026 arrived, and what happened?

Of course a compromise.

Reports around mid March 2026 said the banks agreed to transfer about NIS 3 billion in 2026 and another NIS 250 million in 2027, and in return the government would shelve the broader five-year excess-profits plan. Translation: the banks paid a big amount now to avoid a bigger threat later. People said it saved them more than NIS 4 billion compared with the original proposal.

So the government gets cash quickly. The banks get certainty. And Rachel gets the honor of continuing to finance everyone’s financial negotiations.

This is the part that makes her laugh, because if she doesn’t laugh she’ll start sending voice notes to strangers. The whole thing is presented like a victory for the public. “Look,” they say, “we made the banks contribute.”

Contribute to what, exactly? To the budget, yes. To Rachel’s mortgage payment? To her business loan interest? To the bank fees that appear like mushrooms after rain? No. The deal is mainly about state revenue and tax policy. It doesn’t automatically mean cheaper borrowing or better deposit rates. It doesn’t come with a cute little button in the app that says: Congrats, your bank is being taxed, enjoy 0.7% less misery.

Rachel’s life stays the same. She still opens the bank app and sees her overdraft line sitting there like a judgmental relative. She still gets messages offering her “pre-approved credit” in the same tone her kids use when they offer to “help” clean their room. She still has that moment at the cashier when the total is higher than it should be, and she thinks: okay, which bill am I postponing to next week?

Banks aren’t thieves because they make profit. Banks feel like thieves to Rachel because they found a way to make profit feel like gravity. She can’t negotiate with it. She can’t appeal to it. It just pulls, month after month, from her mortgage, from her loan, from the tiny gap between what she earns and what it costs to keep three kids fed and a business alive in Rishon.

The government and the banks can call it a compromise. In Rachel’s kitchen, it has a simpler name.

A deal between professionals, paid for by amateurs.

© The Times of Israel (Blogs)