Daily Israel Report

Seeking Shekels for Gaza

Banks HaPoalim and Discount refuse to transfer Israeli shekels to Gaza. The government has asked its Postal Bank to do the job.
By Hillel Fendel
First Publish: 1/1/2009, 1:01 PM / Last Update: 1/1/2009, 1:56 PM

Flash 90

Bank HaPoalim and Bank Discount announced their refusal on Thursday to transfer Israeli shekels to Gaza. The Bank of Israel has asked the government's Postal Bank to do the job.

Money in Hamas terrorist's hands.
Flash 90 (file)

The request to transfer the shekels to Gaza and help sustain the cash flow there comes directly from the Finance Ministry and Bank of Israel Governor Stanley Fischer. He apparently fears that Gaza will abandon the Israeli shekel altogether and start using the Egyptian lire instead.  Fischer’s close ties with his counterpart in the Palestinian Authority are also cited as a possible explanation for his desire to stream cash into Gaza.

The refusal by Bank Discount and Bank Hapoalim to send money to Gaza comes on the heels of a court suit filed against them by the Israel Law Center (ILC). The suit declares that sending money to Gaza is a blatant act of terrorism sponsorship.

A spokesperson for Bank of Israel said that Fischer did not request that the Postal Bank send money to Gaza, but ILC Chairperson Attorney Nitzana Darshan-Leitner says this is not true.  She adds that the Gazans need the shekels because "all they have is dollars and Euros that they smuggle in from various sources.  So Israel provides them with shekels in exchange."

The Postal Bank, an arm of Israel's Postal Authority, will apparently have no choice but to accept the mission of sending money to Gaza, as it is a government-owned institution. However, in light of the court suit, it has asked the government to guarantee any losses it might suffer as a result of similar court suits against it.

The Israel Law Center suit stated that Bank of Israel must stop forcing Banks HaPoalim and Discount to provide banking services to Gaza banks.  The Hamas terrorist organization rules Gaza, the suit states, and the money it receives is used to pay its Hamas members’ salaries in cash.  “The transfer of cash to Gaza, therefore, gravely endangers the security of Israeli citizens,” the suit states, “and especially that of those who live in Sderot, Ashkelon and the communities around Gaza.”

The suit was filed well before the current war against Hamas began. 

It further states that by being forced to send money to Gaza, “the banks become vulnerable to civil suits by families of terror victims in Israel and abroad, as well as criminal suits.”

Darshan-Leitner explained, “It is very grave that even now, during the war with Hamas, Stanley Fischer continues to insist on the transfer of money to Gaza.  Banks HaPoalim and Discount were correct in refusing to do this, and if the Postal Bank tries to fill their shoes, they will be exposed to the same procedures as anyone else who aids terrorist organizations. The guarantee it requested from the government won’t save it from criminal trials or from a court ruling that it provided banking services to a terrorist organization.”