Mizrahi-Tefahot, Israel's third-largest bank, on Wednesday said it would pay 2% interest on checking accounts while lowering interest rates on balances below zero.
The bill is set to be brought for a preliminary reading in the Knesset on Wednesday.
TV advertisements for banks in Israel deal with marginal trivialities in an age of economic confusion.
The top five banks earned a combined profit of NIS 6.3 billion ($1.7 billion) in the first quarter.
Israeli Heritage Minister Amichai Eliyahu's remarks were criticized by politicians from the coalition and opposition alike.
Main indexes on Tel Aviv Stock Exchange edged slightly down as Prime Minister Benjamin Netanyahu's coalition appeared to delay the Judicial Selection Committee vote
With six months until the end of Prof. Amir Yaron's term as Bank of Israel Governor, uncertainty over his replacement could further damage the economy.
Opposition MKs say that such a committee already exists and hasn't been convened since the government's formation in December.
Israel's aggressive policy-tightening cycle has sparked anger among its citizens as mortgage, loan payments and the cost of living have soared, with inflation staying around 5%.
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