Gaza's Banking Crisis: Palestinians Face Empty Bank Vaults Despite Reopenings During Ceasefire

Banks maintained operations where possible, but abandoned efforts when a truce collapsed in March.

Palestinians attempting to reconstruct their lives in Gaza's devastated landscape face critical shortages: food, clean water, medicine, and importantly, cash.

When two bank branches resumed operations on Sunday, eager clients rushed to access services, only to face immediate disappointment.

"I immediately visited the Bank of Palestine's Deir al-Balah branch when it reopened today," explained Ahmad Abu Foul, a 38-year-old resident of Khan Yunis in southern Gaza.

"I hoped to withdraw my long-inaccessible salary, but discovered there was no money available," he stated.

Abu Foul, displaced from northern Gaza due to conflict, managed to renew his credit card, but found the bank vaults empty.

"What options do we have? We cannot purchase necessities in markets nor access our accounts. How will we sustain ourselves?" questioned Taysir Abu Shabak.

Gaza's cash shortage began two years ago following Hamas's unprecedented cross-border attack on Israel, which triggered a severe counteroffensive.

While banks initially maintained operations where feasible, they ceased functioning when the March truce collapsed. A bank director confirmed to AFP that Sunday marked the first reopening since then.

Existing Israeli currency became trapped in limited small-scale commerce, with many notes deteriorating to unusable condition over months.

UN experts recently criticized Israel's "financial stranglehold" on the region.

"Most banking infrastructure has been destroyed. Israel has prevented new currency from entering," they reported, highlighting alarming price inflation.

"Digital payment systems are compromised by frequent electricity and telecommunications failures."

Following pressure from Washington, Israel and Hamas agreed to a ceasefire last week, enabling two Bank of Palestine branches to reopen Sunday.

Despite forming queues, customers found no cash available.

"Currency in Gaza is severely worn," explained an anonymous Bank of Palestine official to AFP.

"People rely on pre-war cash reserves and a 'friend-to-friend transfer' banking application due to liquidity absence."

For months, damaged banknotes have undergone market repairs.

Food purchases depend on cash or bank transfers, often complicated by utility and communication disruptions.

Another unnamed bank official indicated that Gazans have experienced substantial savings losses, with transfer commissions reaching 40 percent.

In February 2024, Israeli military released footage showing safes and bags containing substantial amounts of Israeli shekels, US dollars, and Jordanian dinars.

The military claimed these were discovered in Gaza tunnels, alongside documents allegedly proving Iranian cash transfers to Hamas.

However, most Gazans remain without financial resources.

"I genuinely believed I could withdraw funds from my account when the bank reopened. I felt hopeful and happy," shared Mahmud Nassar, 40.

"Upon arrival, I discovered no cash was available," he told AFP.

"We're back to our starting point—depending on merchants charging excessive fees for money withdrawal, completely depleting our resources."

Nada Abu Amra, 33, from Deir al-Balah, expressed near desperation.

"My husband attempted to withdraw money today but found none. Yes, the bank reopened, but without any liquidity," she explained.

"People are exhausted—they simply want to withdraw just 100 shekels without commission fees, enough to purchase basic food."