Israel’s Finance Minister May Cut Off Palestinian Banks From Global Banking System

Palestinians could be cut off from Israel’s banking systems. According to a report in Haaretz Israeli finance minister Bezalel Smotrich could ensure that Palestinian banks be cut off from Israeli banking system but also the global banking system by next week. The Palestinian economy is tied to the shekel and so it is reliant on Israel for its financial system.

In 2017, Israel had allowed two of its banks – Israel Discount Bank and Bank Hapoalim – to maintain ties with Palestinian banks by passing a law granting them immunity from lawsuits charging them with financing terrorism. Smotrich’s decision will end that law unless Prime Minister Benjamin Netanyahu convenes a special cabinet meeting to repeal the decision.

If the legal cover is repealed, the two Israeli banks will no longer be able to do business with the Palestinian Authority or Palestinian banks. What this means according to Haaretz is that Palestinian banks will no longer be able to receive cheques from Israeli companies for payment.

This is not the first time that Smotrich has threatened such actions. The finance minister had threatened to escalate matters earlier this month after the US imposed sanctions of four Israeli settlers. So far, he had not done so.

According to the UN, Palestinian workers who work in the West Bank and Jewish settlements were already at risk. Post the Hamas attack, UN International Labour Organisation (ILO) said that 160,000 Palestinians were sent back to Gaza after which Israel closed access to the West Bank and other Jewish settlements. Work permits of over 18,000 Palestinians have also been cancelled according to the UN who claim that Palestinians earn right times more working in Israel than they do in Gaza where unemployment is high.

Reports suggest that Israel is now looking to Indians rather than Palestinians as migrant labourers. A Voice of America report stated that the Israeli construction sector has the government for permission to employ one lakh Indian migrants in the construction sector.

“Right now, we are negotiating with India,” Haim Feiglin, the vice president of the Israel Builders Association was quoted as saying by VOA last year. Indian workers are already leaving for Israel in batches

Smotrich’s decision comes after the UN Security Council resolution ordering Israel to unconditionally open up avenues for aid to reach Gaza.