Israel Permits First Arab-owned Bank in the Territories Since 1967

The Bank of Israel gave its formal permission Wednesday for the opening of an Arab-owned bank in Nablus, the first Arab bank in the administered territories since the 1967 Six-Day War.

Brig. Gen. Ephraim Sneh, head of the civil administration in the West Bank, presented the official permit to Jawdat Sha’sha, chairman of the Board of Governors of the Cairo-Amman Bank, to establish a branch in Nablus. Shmuel Goren, coordinator of government affairs in the territories, said if the Nablus branch proves successful Israel would consider branches in other West Bank towns.

The Cairo-Amman Bank, controlled by Jordanian and Palestinian shareholders, had five branches in the West Bank before 1967. All ceased operations after the Six-Day War.

The reopening followed two years of negotiations between the Israeli authorities and Jordanian entrepreneurs. There were no direct negotiations with the Jordanian authorities. Goren said the agreement was made possible in large measure by American mediation and expressed thanks to the U.S. for its role.

Under the agreed terms, Jordan will supervise the bank and apply the same regulations that govern banks in Jordan. Israel, however, will supervise the monetary and security operations to make sure that no funds passing through the bank are diverted to hostile elements.

According to Goren, “there is very little prospect that hostile elements will use the bank.” He stressed that Israel has the right to shut it down if there is any breach of the agreement. He said the bank will meet “real economic needs” in the territory and if that served political ends such as strengthening Jordan’s position, “so much the better.”

Jordan’s agreement to the terms for the bank is seen here as part of its efforts to increase its influence in the West Bank at the expense of the Palestine Liberation Organization.