Israeli banks set to sever financial links with Palestinian banks, sparking payment fears

Two Israeli banks, Hapoalim and Discount, plan to cut their financial ties with Palestinian banks, which could lead to significant disruptions in the Palestinian economy. This decision affects essential banking operations, including salary payments and trade transactions between Palestinians and Israelis.

Palestinian banks rely on these Israeli banks for correspondent banking services, which facilitate payments in shekels and other financial transfers. The Israeli finance ministry cites security concerns as the reason for this move, raising fears about the economic impact on Palestinian communities reliant on these banking services.