Hamas has approved for the first time the establishment of a new bank in the Gaza Strip under its authority, a move that could open a door to bypass a financial blockade imposed by Israel and its Western allies. Islamic National Bank chairman Ala al-Rafati said the new financial institution had received a license from the government run by the Islamist group which controls the Palestinian coastal enclave and planned to open for business early in the new year.
Hamas said it will not control the new bank, an assertion disputed by its rivals in the Israeli-occupied West Bank, where President Mahmoud Abbas's Western-backed Palestinian Authority is based. Rafati likewise asserted that the bank had no factional affiliation, saying the venture was designed to boost local investment in Gaza's economy "in an environment of resistance," a reference to the conflict with Israel.
The Western-backed Palestine Monetary Authority (PMA) in Ramallah, which registers and regulates established banks, said it would shun the Islamic National Bank, meaning the institution may have to function autonomously, without access to funds in the West Bank or to the global banking system. "The PMA has not authorized the licensing of such a bank, and, accordingly, if there is such a bank, we will pursue every legal action to prevent it from operating," said PMA governor Jihad Wazir.
Matt Levitt, a former senior official at the U.S. Treasury Department, said such a bank would face serious obstacles. "This would be mostly a bank in name only," said Levitt, an expert on militants' financing at the Washington Institute. "It's unlikely that any international bank, let alone any Israeli bank, would have anything to do with any bank registered with Hamas and not with the West Bank-based government."
Despite the boycott and other hurdles, a senior Western diplomat said the new bank, which will operate under Islamic rules that bar charging interest, could prove profitable. "You get all the money ... from the tunnels ... and then you actually use it for investments within Gaza. You get a rate of return and you're using this liquidity more efficiently," the diplomat said. 
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