Ramallah, Asharq Al-Awsat-The Palestinian Authority announced the illegality of the “Islamic National Bank” which is the first bank to be licensed by the Hamas movement which controls the Gaza Strip. The Palestinian Monetary Authority [PMA] said that the so-called “Islamic National Bank” whose establishment has been announced in Gaza has not applied for the appropriate [financial] licenses in Palestine, in accordance with Articles 3 and 4 of Banking Law No. 2 of 2002 which stipulates that the PMA is the only authority empowered to grant [bank] licenses.
The Palestinian Capital Market Authority [PCMA] also announced that the “Islamic National Bank” had not applied for the necessary licenses and permits under the provisions of Article 11 of Securities Act 12 of 2004.
The PMA and the PCMA publicly announced that the Islamic National Bank was illegal, as was the advocating of its use, both warning the public against buying its shares.
This legal dispute is not a new one, and Chairman of the Islamic National Bank Ala Al-Rafati played down the PMA’s announcement of his banks’ illegality informing Asharq Al-Awsat that “we do not consider this Monetary Authority to have jurisdiction on the Gaza Strip, it is ineffective, and works within the international system that does not care for the [Palestinian] national interest.”
The PMA announcement regarding the illegality of the bank means that it will operate independently solely within the Gaza Strip. Al-Rafati said “Yes, we have our own special circumstance, we are a national bank, and the transfer [of funds] is not everything, we will [also] not observe international conditions” He added “Even in Ramallah they are unable to transfer funds from abroad without US and Israeli oversight, and it is the PMA that is concerned with implementing these measures.”
Al-Rafati added that his bank would work to create a new banking atmosphere which would facilitate banking operations in the Gaza Strip saying “There are many savers [customers] in the Gaza Strip, and there is no shortage of the Israeli Shekel in the Gaza Strip, but this is veiled for fear of capital. We will remove these fears.”
Al-Rafati accused the PMA of turning banks in the Gaza Strip into mere [financial] transfer service, unable to offer services, or even deal with the public. Al-Rafati is betting that the financial leaders and the ordinary people will deal with the new bank as it is “purely Palestinian” and free of external interferences. He believes that “the Hamas government [in Gaza] and its members and its wealth have sufficient liquidity to allow for the new bank to operate away from the boycott by the Palestinian Authority and Israeli restrictions.” Al-Rafati said “We are the first to offer our savers a [financial] alternative that cannot be received except by leaving Palestine.
Al-Rafati denied accusations from sources within the Fatah movement which claimed that the bank is affiliated to Hamas saying that the Islamic National Bank is a private institute with a Board of Directors and an Executive Body, operating in a professional manner.
However an international expert in the financing of militant groups at the Washington Institute said “This will be a bank in name only.” Western diplomats also said that the emergence of an alternative banking system in the Gaza Strip is not surprising, to which Al-Rafati responded by saying “We are not an alternative to anybody.” Hamas members and its supports are reluctant to put their money into non-Islamic banks, and Sheiks from within the Hamas movement have issued a number of fatwas banning the deposition of money into non-Islamic banks. Therefore it is expected that all Hamas leadership and members, in addition to [Gaza Strip] governmental accounts, will be transferred to the new bank.