Jerusalem, 13 September, 2026 (TPS-IL) — Bank Hapoalim and Israel Discount Bank were set to halt correspondent banking services to the Palestinian Authority on September 1, a move that could disrupt shekel clearing, import-tax payments, and both Palestinian and Israeli economies.
Bank of Israel Governor Amir Yaron last week persuaded the banks to extend the services until January 1, 2027, after direct pressure. Yaron said this was his final request and that if legislation were not resolved by then, he would support the banks’ decision to withdraw.
The banks want to end the services because of concerns over legal exposure to terrorist financing and money laundering allegations. They fear transactions reaching terrorist groups could expose banks and executives to criminal investigations, major lawsuits and international sanctions, including from the United States.