(MENAFN - Jordan Times) Arab Bank announced Thursday that it has decided to close two of its three branches in Gaza, citing worsening conditions in the strip.
The bank had earlier laid off employees staffing the two outlets.
Country Manager of Arab Bank Palestine Mazen Abu Hamdan said in a statement to The Jordan Times: We regret these decisions, but it is becoming difficult in the present environment to maintain our high standards of operation.
Noting that the decision came after the bank had already reduced the number of its staff there, Abu Hamdan further stated: The bank is sorry for the adverse consequences that this action might have on the local population and business community of Gaza, which have already endured significant economic distress.
The bank regrets the hardship that this closing has caused to its dedicated staff, and will fairly compensate them in recognition of their years of service and commitment.
The bank added in the statement that it hopes that the circumstances affecting Gaza will improve in the near future and that it will then be able to reinstate full operations there.
The decision sparked a stampede by depositors and a crush in which several clients fainted, Reuters reported.
The street outside the lone remaining branch in Gaza City quickly filled with people from all over the strip demanding their money. The three bank clerks inside were rapidly overwhelmed by worried customers.
Ambulances with sirens wailing pushed their way through backed-up traffic to tend to people who fainted in the crush, the agency said.
The Palestine Monetary Authority (PMA) fined the bank a maximum JD300,000 for closing its Gaza branches without approval.
The PMA regulates banks in the West Bank and Gaza Strip, where the Islamist group Hamas seized control in 2007 from forces loyal to the Fateh movement of Palestinian President Mahmoud Abbas, who controls the Palestinian Authority (PA).
Hamas, which opposes a peace treaty that would recognise Israel, does not recognise the PA government, and the territory it controls is blockaded by Israel and Egypt. In March, Hamas security forces took 400,000 from a Bank of Palestine branch in the Gaza Strip, challenging a PMA order to freeze assets in compliance with money laundering regulations.
Palestinian bankers said banks in Gaza fear that Hamas plans to impose taxes on them. "Banks cannot operate in an environment such as the one that exists in Gaza. It has become a risky business there," a senior Palestinian banker told Reuters.
International anti-laundering rules ban banks from doing business with Hamas, which is listed in the West as a terrorist organisation.
One PA employee in Gaza, Jehan Al Sersawi, said she had been trying since Wednesday to withdraw her salary and savings of 2,500 but could get no money out.
They refused to give me my 2,500 deposit and also said they cannot give me the salary today. They have only three employees to deal with all those people, she said.
The Arab Bank must understand that this is not a stable for horses they can shut down without notice. They should deal with us as human beings who have been their clients for years.
Gazas 1.5 million Palestinians rely heavily on foreign aid. Their modest economy was wrecked in last years three-week war with Israel. Gaza has nothing to export and over 50 per cent of the workforce is unemployed.