Bank Leumi's board of directors has decided to transfer NIS 20 million to Holocaust survivors and heirs of Holocaust victims who deposited money in the bank before World War II, as "a gesture of goodwill."

The money will be given for distribution to the government company established in 2006 to locate and restore the assets of Holocaust victims.

Previously, Bank Leumi had conditioned payment on receiving assurances of immunity from future claims.

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The asset location company said that the bank's decision will affect the decisions of many other bodies in Israel that profited from the money of Holocaust victims.

In December 2004, a parliamentary committee of inquiry headed by MK Colette Avital determined that Bank Leumi owed up to NIS 307 million to the heirs of Holocaust victims. Accountants for the committee located some 2,500 bank accounts that were apparently owned by Jews killed in the Holocaust. The committee determined that Bank Leumi had transferred most of these accounts to the British Mandate government, and thereafter to the State of Israel, but often did so at unrealistic values, and in other cases returned only some of the money to the victims' heirs after the war. Accountant Yehuda Barlev, who worked for the committee, said that he found at least 180 accounts of victims held by the bank to this day.

The bank's board and its attorney, Ram Caspi, have been fighting the committee's findings since 2003, and under pressure from the banks, the Avital Committee published a miserly formula for calculating the debts. According to this formula, if heirs to the accounts are not found, Bank Leumi will pay NIS 35 million at most.

Following release of the Avital report, however, the bank said it would pay the NIS 35 million only on condition that this payment "close the affair." The chairman of Leumi's board of directors, Eitan Raff, reiterated this position in a meeting last month with Minister Rafi Eitan, whom the cabinet made responsible for the bank's privatization.

The asset location company rejected Raff's proposal, saying it cannot accept the bank's demand for immunity from future claims, because it cannot forgive debts owed the heirs of Holocaust victims in the name of those heirs.

According to the bank's new stance, if it is found to have other accounts or assets belonging to Holocaust victims, these will be transferred at their real value to either the heirs or the asset location company. However, the bank added, "to the best of its knowledge," it does not have such assets, and all its debts to heirs stem from "hypothetical recalculation of sums that the bank transferred decades ago."