Palestinian banks enter 'state of emergency'!

Israel's far-right Finance Minister Bezalel Smotrich's decision not to extend cooperation between Israel and Palestinian banks has caused the Palestinian banking sector to enter a "state of emergency" once again.

Currently, two Israeli banks, Israel Discount Bank and Bank Hapoalim, manage the relationships of Palestinian banks with the banking system in Israel and the rest of the world.

To protect these two banks from lawsuits filed against Palestinian banks in the US and by the Palestinian Authority over accusations of "transferring funds to terrorist groups," the Israeli government issued a decree 3 years ago that protects these banks from all such accusations, which is renewed annually with the signature of the Finance Minister.

If Israeli Finance Minister Smotrich does not renew this decision, the immunity of the Palestinian Authority will be lifted, and the two Israeli banks will be exposed to lawsuits.

In early April, the Israeli Ministry of Finance decided to extend the decision covering the protection of Israel Discount Bank and Bank Hapoalim for 3 months instead of 1 year.

According to information obtained from sources in the Palestinian banking sector, Palestinian banks are looking for ways to overturn Smotrich's decision to not extend interbank cooperation, which is set to take effect in the third quarter of 2024.

Smotrich's decision means the paralysis of the Palestinian economy, especially considering the hundreds of millions of dollars in commercial transactions and bank payments made abroad every month.

COOPERATION BETWEEN PALESTINIAN BANKING SECTOR IS IN PALESTINE'S INTEREST

Cooperation between Israeli banks and Palestinian banks is in the interest of the Palestinian banking sector as it facilitates cash transfers for commercial purposes between the parties. Without this cooperation, commercial cash transfers between the parties cannot take place.

According to data from the Palestinian Central Bureau of Statistics, the monthly trade volume between the parties is approximately 500 million dollars, and the total amount of all money transfers exceeds 1 billion dollars per month.

Furthermore, Israeli banks are seen as the "key" for many Palestinian banks to access the global banking system, and without this cooperation, most Palestinian banks would lose most of their essential functions.

The total assets of the Palestinian banking sector are over 22 billion dollars, with customer deposits exceeding 17.5 billion as of the end of April, while debts are at the level of approximately 12 billion dollars.

There are a total of 13 banks operating in the banking sector in Palestine, 6 of which are foreign, including 5 Jordanian and 1 Egyptian.

In accordance with the Paris Economic Protocol, the Palestine Monetary Authority, which serves as the Central Bank of Palestine, supervises the banking sector and all banking activities.

Far-right Finance Minister Smotrich had announced that he would not extend the cooperation between Palestinian and Israeli banks.

Following the decision of Norway, Ireland, and Spain to recognize Palestine, Smotrich stated, "We will not extend the cooperation granted to Israeli banks that transfer money to banks in the West Bank."

Smotrich had announced that he would not extend the cooperation between the banks after Norway, Ireland, and Spain announced that they would recognize Palestine.

Norway, Ireland, and Spain had announced that they would recognize Palestine on May 28 within the 1967 borders, in accordance with international law and relevant United Nations Security Council (UNSC) resolutions.