Daily Israel Report

Hamas Opens Gaza Bank to Circumvent Sanctions

Hamas opens Gaza bank to pay employees' salaries and circumvent international sanctions. The new bank has plenty of cash, its owners say.
By Maayana Miskin
First Publish: 4/23/2009, 10:30 AM

Israel News Photo: file

Hamas has opened a bank in Gaza that will be used to pay Hamas members' salaries and get around the barrier of international sanctions that has blocked Hamas from getting funds from other banks.

The new financial institution has been named The National Islamic Bank. Hamas maintains that the bank contains enough cash to pay salaries for the month of April and to earn investors' trust, despite a ban on cash imports to Gaza imposed by Israel.

The terrorist organization, which heads the de facto government in Gaza, has complained that the ban on cash harms the local economy. It has insisted that Israel let some cash in to prevent local banks from collapsing. The ban has been lifted at times to allow Palestinian Authority officials in Ramallah to send mney to PA loyalists in Gaza, but a lack of internal PA controls has allowed a large amount of the funds to reach Hamas.

While other banks suffer the effects of the cash shortage, Hamas says its new bank has 20 million dollars in cash and is quickly raising more by selling shares for one dollar each.

The bank will be governed according to Islamic law.

The Board of Directors controlling the bank is staffed almost exclusively by Hamas loyalists, and its first customers will be 6,000 Hamas employees. However, bank director Alaa al-Rafati, a Hamas member, said Wednesday that the bank will be independent. The bank is “a private enterprise,” and is not associated with the Hamas leadership in Gaza, he said.

Hamas announced last year its intention to create a private bank in order to pay salaries. The PA opposed the plan, has declared it illegal and called on Gaza Arabs to boycott the institution.