A new way to clamp down on the Palestinians... Israel hoards the "shekel" in the banks

Nablus -

For the fourth time and in just a week, Muhammad Hamdan encountered a slander from the bank with which the company he works for in the city of Nablus (the northern West Bank), and with great difficulty he deposited an amount in Israeli shekels (a dollar equals 3.20 shekels) that is the proceeds of the work of the institution in which he works.

Recently, Palestinian banks, under the instructions of the Monetary Authority, limited the deposit of large sums of Israeli shekels to their customers, and obliged them to fulfill certain conditions for that under the pretext that their cash had exceeded 6 billion shekels, which exacerbated the problems of citizens and merchants alike.

Hamdan, who works as a "cash employee", says that he is facing some stress from the bank they deal with by accepting the shekel currency, even though they are a large company and they are entitled to deposit a certain amount daily.

He adds to Al Jazeera Net that it is no longer easy for the bank to accept the shekel (cash) securities, and it is as if it determines each institution the value of its daily deposit, or it resorts to dividing the amount in batches for several days to solve the problem.

Hamdan believes that the bank is the safest place for citizens and merchants to deposit funds, and that what is required is that banks solve the dilemma with Israel, not succumb to it, and that deposits of institutions and individuals depend on the value of the shekel naturally and without restricting them.

malicious intent

Under the pretext of fighting "terrorism", money laundering and combating crime in the markets, Israel stopped receiving cash from Palestinian banks two years ago.

The Israeli Knesset approved what is known as the “Locker Law”, which entered into force in early 2019 to restrict financial (cash) transactions that exceed 11,000 shekels, and that the customer is obliged to pay them electronically.

And if the occupation’s measure and decision seem on the surface to regulate and control the financial transaction (cash), then it harbors “malicious intentions” that aim - according to economists and Palestinian officials - to impose more pressure on the Palestinians and restrict their freedom to politically acquiesce them, especially since the decision of Israeli banks to stop receiving the shekel coincided and announced Occupation for the deal of the century.

The agreements signed between the Palestinians and Israel, such as economic Paris, oblige Tel Aviv to receive money in the category of shekels in the absence of a Palestinian central bank on the one hand, and “the currency returns to its original homeland” according to the law on the other hand.

Palestinian financial expert Muhammad Salameh says that Israel hoards the shekel for financial, economic and political purposes, and it is the meanness of Israeli law that it did not protect Israeli banks that deal with their Palestinian counterparts, which deal in cash whose source is difficult to determine, from the accusation of terrorism.

Palestinian workers in Israel deposit between 10 and 12 billion shekels annually (Al-Jazeera)

Israel..the source and dominator

Oddly enough, Salama wonders about the source of the cash from the Israeli shekel to the Palestinians except for Israel, which comes through the Palestinian workers there, the Palestinians from Jerusalem or the Palestinians of 48, in addition to the Israeli crossings and money changers.

Then how does Israel fear money laundering?

Salameh wonders, while she is besieging the Palestinians for security and militarily controlling the crossings and borders, "but she wants to implicate them by accumulating the shekel to exercise her arrogance on them and to bring them to their knees politically."

Although the Palestinian Monetary Authority presented statements showing the details of the accumulation of the shekel and in accurate numbers, it is natural for Israel to invoke and accuse the Palestinians of terrorism and money laundering, "it created the appropriate environment to be accused in advance of refusing to receive the shekel."

According to Salameh, the accumulation of more than 6 billion shekels hindered the ability of banks to lend, contribute to economic development, and bear the cost of storing, shipping and insuring funds, in addition to the fact that these accumulated funds have become “waste” that cannot be used or invested.

The Central Bank of Israel refuses to pay interest on the accumulated funds, and thus drains the balances of the Palestinian Bank and its surplus liquidity, which enables it to link deposits and obtain financing from external banks.

Documented information indicates that Palestinian workers in Israel deposit between 10 and 12 billion shekels annually, and that about 5 billion shekels are spent annually by the 48 Palestinians in the West Bank.

According to the agreements signed between the Monetary Authority and the Central Bank of Israel, the latter is supposed to receive a shekel surplus every quarter, amounting to 4 billion shekels.

The accumulation of the shekel affects the profit of the banks, which are mainly based on receiving money and paying interests to depositors in various currencies (Al-Jazeera)

Drain for the bank and depositors

The accumulation of the shekel affects the profit of the banks, which are based mainly on receiving funds and paying interest to depositors in various currencies, and pumping them back into the market in the form of loans, usually in dollars and Jordanian dinars, and a few of them in shekels.

This makes, according to the director of the Association of Banks in Palestine Bashar Yassin, a big difference between depositing and disbursing the shekel, and consequently the banks' losses accumulate because the deposited shekel is not invested in the Palestinian market.

Also, some Palestinian banks have accounts with their Israeli counterparts for the purposes of foreign trade, documents and financial credits. As a result of the Israeli banks not receiving the shekel, the accounts of the Palestinian banks are exposed and become without balance.

The shekel surplus affects depositors by the banks’ reluctance to receive their deposit in shekels, and by imposing fees on the deposited amount at varying rates to avoid receiving it, and the bank cannot link the deposits it received for a term to benefit depositors.

Yassin suggests solutions to reduce the amount of cash in shekels and its burden on the Palestinians, such as using payment methods and electronic transfers, in addition to transferring workers' wages and salaries through electronic transfers, which are safe and available methods around the clock.

According to Yassin, Israel must realize that its reception of the shekel is not a favor because it is its currency, indicating that the crisis is essentially political and wrapped in the economy, and is used to blackmail the Palestinian Authority and the Palestinian banks together.

political blackmail

The researcher at Yabous Center for Consultation and Strategic Studies, Suleiman Bisharat, agrees with his predecessors that the goal is to blackmail the authority politically through the economic portal.

He tells Al Jazeera Net that the occupation refuses to achieve the concept of independence for the Palestinian Authority and the Palestinians, both politically and economically, by keeping the dependence on Israeli liquidity first, and linking them to consumer foreign aid without achieving developmental and productive independence for them secondly.

All of this cannot be overlooked from the concept of control and control with the aim of exhausting the Palestinian economy by linking it directly to any political changes or a tool of political blackmail.