Palestinian banks ready to provide interest-free loans
Palestinian banks announced on Sunday they would provide interest-free loans to some 40,000 Palestinian government workers in a bid to ease an financial crisis and avoid international sanctions. "We are ready to lose millions of dollars but not to risk ourrelationship with U.S. banks and risk international sanctions," a banking official told Reuters. This new move avoids dealing directly with the Hamas-led government.
Earlier on Sunday, four armed Palestinian factions linked to Hamas and Fatah threatened local banks, saying it was their national duty to help pay out the salaries and assist the Palestinian people.
The banks said they would provide the loans first to those earning NIS 1,500 per (some US$330) month or less and potentially expand the scheme to other, higher-salary employees later. A total of 165,000 people are employed by the government.
The loans are to be extended from Monday and are due to cover one month's salary. The move is expected to cost the banks about $13 million.