Armed gangs, including Hamas-backed groups, have plundered at least $120mn from banks in northern Gaza in just the past two months, according to UN estimates, as the war-ravaged strip suffers from a severe cash crunch.
The thefts amounted to at least a third of the cash stored in stranded vaults, according to mid-May estimates seen by the Financial Times. About $240mn more is sealed in bank vaults in northern Gaza, some entombed in concrete to try to prevent looting following the collapse of civil order in the besieged enclave.
The robberies have fuelled concerns among Israeli officials that some of the funds could further fuel Hamas’s insurgency as the militant group gains control of scarce banknotes in the besieged enclave’s closed wartime economy.
The conflict and Israeli restrictions on the movement of cash and armoured cars have limited the availability of physical money. Residents must pay a fee a week in advance to even join the queue for a cash machine in central Gaza, one of a tiny handful of functioning machines left for the strip’s more than 2mn people.
The most dramatic bank robberies took place on April 17 and 18, shortly after the Bank of Palestine — the biggest financial institution in the occupied Palestinian territories — opted to pour concrete around the vault of its branch in the once-upmarket district of Rimal.
The emergency measure made no difference. An explosion rang out at the branch on April 17; one witness told the FT of banknotes fluttering through the air. Thieves absconded with an estimated $31mn in various currencies, according to an internal document sent to the bank’s shareholders and seen by the FT.
The next day, the bank told customers and merchants to come to the remaining branch so they could withdraw their deposits before more cash was stolen. Instead, when they opened the doors, they found “armed groups already inside the branch”, according to the document.
Shots were fired and an employee was taken to hospital with a suspected heart attack before others were forced to open the vaults at gunpoint. The bank estimated that $36mn was taken in this second heist, “confiscated on orders . . . from the highest authority in Gaza”, a veiled reference to Hamas, which ruled the territory before the war. The Rimal bank robberies were first reported by Le Monde.
While the robberies threatened the Bank of Palestine’s employees, the more than $70mn stolen does not threaten its stability given its overall $5.41bn in customer deposits, most of which — along with the lion’s share of its business — is in the West Bank. At the start of the war its liquidity coverage ratio, a common metric for short-term financial health, was more than 740 per cent, compared with less than 200 per cent for US and UK banks.
“From the start of the war, [the bank] has taken all necessary precautions and provisions to ensure that its soundness and stability as an institution, and with respect to its deposits and portfolio, will remain intact even under the worst-case scenario and in the face of the most challenging developments in Gaza,” the Bank of Palestine said in a statement, adding that the estimates of the amounts stolen “cannot be confirmed due to the difficulty of assessing the damages on the ground”.
Banking officials are careful not to directly blame Hamas, but this amount of money in the hands of the “highest authority” is likely to fuel an already evolving insurgency against the Israeli military, said two Israeli officials.
The two large-scale robberies capped a theft spree that had begun earlier on a more modest scale: by April, about $7mn had already been stolen from Bank of Palestine branches, mostly from the ATM cassettes, by armed gangs that “drilled into” the buildings, according to the internal document.
The thefts came as Gazans, most of whom live in poverty, struggle to find banknotes to buy essential supplies as inflation spirals following eight months of war.
The enclave uses Israeli shekels, but Israel’s military has blocked the entry of fresh notes, forcing ordinary Palestinians to use faded Jordanian dinars and dwindling supplies of US dollars as shekel notes rip apart from wear and tear.
The Israeli military itself seized 200mn shekels, about $53mn, from another Bank of Palestine branch in Gaza “to prevent the money from reaching Hamas”, Ma’ariv, a Hebrew newspaper, reported in February. That cash remains with Israeli authorities, said an international diplomat briefed on the issue. The Israel Defense Forces did not respond to a request for comment on total amounts seized since the war began.
Further worsening cash shortages, wealthy Palestinians have sent tens of millions to an Egyptian tour operator, which demands $5,000 a person in crisp new $100 bills — which are less at risk of disintegrating than older cash — to enable them to flee Gaza.
Within a month of Hamas’s devastating attack on Israel on October 7, which triggered the war, it was clear to Bank of Palestine that the cash in its branches would be a problem. As northern Gaza was devastated by Israel’s invasion, the bank convinced the UN to carry out a dangerous convoy to transport banknotes worth $50mn to the south.
A second convoy was abandoned when the UN arrived to find Israeli air strikes had destroyed a branch. Appeals to the Israelis, the US, Qatar and the UN for help moving the cash failed. “The evacuation of cash from Gaza is virtually impossible,” the bank wrote to shareholders earlier this year.
That left more than $100mn in cash at its two most prestigious branches, in Rimal and in downtown Gaza City, setting the scene for the subsequent thefts.
Before the war, Gaza had more than 90 cash machines and 56 branches of banks, including the Bank of Palestine, Cairo-Amman bank and Quds Bank. All dealt mostly in Israeli shekels after the 1990s Oslo agreements reinforced their position as the de facto currency of the occupied Palestinian territories.
Cash was moved in armoured cars, with Israel’s facilitation, between Gaza and the occupied West Bank, where the banks and Palestine Monetary Authority are based. The Bank of Israel would trade soiled banknotes for new, or allow fresh injections of currency, sometimes in Brinks trucks, during periods of calm.
Bank transfers, even from abroad, are still sometimes possible to internationally recognised banks with a presence in Gaza, like the Bank of Palestine, but using that money has proven increasingly difficult and expensive.
The Palestine Monetary Authority on May 8 launched a commission-free, instant electronic payments system to “compensate for the cash liquidity shortage”. But transferring money digitally requires electricity and an internet connection, both in short supply.
Newer currency notes, meanwhile, command a small premium over older ones at some shops, as wear and tear degrades the limited cash in Gaza.
In northern Gaza, where hunger is acute and aid convoys rare, traders charge a 20 per cent commission on bank-to-cash transfers, said Ibrahim al-Kharabishy, a lawyer in Jabalia.
His old clients, some outside Gaza, send bank transfers either for his work or to support him, his three children and his pregnant wife. To buy the “exorbitantly expensive” canned peas, chickpeas and a small amount of tinned meat, he transfers money to shopkeepers using a banking app.
But given the prices and commissions, he still struggles to afford the food. “I consider myself well-off but I can’t afford them,” he said.
Abou Fares, who fled to southern Gaza with his family, has struggled to get any cash in recent weeks. A dealer recently took a 10 per cent cut of 5,000 shekels he transferred digitally, paying him out 4,500 shekels, or about $1,200, in old, soiled banknotes.
Reaching a cash machine entails the risk of travelling through an Israeli checkpoint and involves paying a fee of 2 per cent of the withdrawal and then waiting a week before he is even allowed to join the queue.
For a short while he had located a mini-mart in Rafah that accepted his Visa debit card but charged inflated prices to use it to buy food for his family — but then the Israelis invaded Rafah, and he heard the shop had been destroyed.
