In line with gov't policy, Discount Bank cuts ties with Gaza banks - Haaretz

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Last update - 20:37 10/10/2007

In line with gov't policy, Discount Bank cuts ties with Gaza banks

By The Associated Press

Discount Bank on Wednesday cut ties with banks in Gaza, in line with the government's designation of Gaza as a hostile territory, the bank said in a statement.

Palestinians do not have their own currency, using the shekel for transactions.

The Discount Bank decision followed a similar one by the larger Bank Hapoalim to sever links with banks in Gaza. They were the only two Israeli commercial banks dealing with financial institutions in Gaza.

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The cabinet declared Gaza a hostile territory last month, following the June takeover of Gaza by Hamas, expelling forces loyal to moderate Palestinian Chairman Mahmoud Abbas.

The hostile territory designation was meant to allow Israel to cut off or restrict vital services to Gaza, like supplies of fuel, water and electricity, but no such moves have been made.

After the Bank Hapoalim decision, Gaza economists said it would hinder commerce in the seaside territory and might lead to a run on Gaza banks. That has not happened.

In its statement, Discount Bank also said it would examine halting relations with all the banks in the Palestinian Authority. It did not elaborate.

Gaza gets its currency through the Palestinian central bank, which has ties with the Bank of Israel through its headquarters in the West Bank city of Ramallah. Though Hamas is ruling Gaza after its takeover, Abbas has appointed a new government that claims authority over Gaza as wel as lthe West Bank.

Related articles

Gaza banks say may shut down by Jan. over financial clampdown

Israel's Hapoalim severs ties with Gaza Strip banks

Cabinet declares Gaza 'hostile territory'

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