Israeli banks plan to limit services to Palestinian banks
Haboom Israel Bank and Discont Israel Bank have announced their intention to end their correspondent banking relationships with Palestinian banks within a few weeks. This move threatens to halt the financing of essential imports, wage transfers, and the expansion of the informal economy in the West Bank. The Palestinian financial system depends on these two banks to conduct transactions in shekels, and five Palestinian banks will lose access to these services in August and September 2026. The World Bank warns that ending these relationships could cause systemic disruptions, lead to increased cash transactions, money laundering, and a deterioration of liquidity, significantly jeopardizing the stability of the Palestinian financial sector.
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