For years, Israeli banks would sweepingly refuse to open bank accounts to Palestinians who legally resided in Israel. In August 2014, an
amendment to the Prohibition on Money Laundering Order, issued by the Bank of Israel, entered into effect. Under the amended Order, Palestinians, including those who legally reside in Israel pursuant to a family unification process, may open Israeli bank accounts.
In the framework of monitoring the implementation of the amended Order, HaMoked has come across a new problem facing Palestinians who already opened an Israeli bank account. It turns out, that the National Insurance Institute (NII) refuses to deposit survivor pensions into the bank accounts of Palestinians legally entitled to this pension. Instead, they are forced to go to the postal bank each time, to receive their monthly survivor’s pension as a cheque. The NII said that pension payments cannot be deposited into the accounts because of a technical problem in the NII computerized system, unequipped to handle the mismatch between the claimants’ Palestinian ID number and the fictive ID number given to them by the banks in opening the account. However, HaMoked has found out that child benefit payments – paid out through the same computerized system – are regularly deposited into the accounts of Palestinians entitled to them. HaMoked is still gathering reports about the method of payment of the other NII pensions.
On May 21, 2015,
HaMoked wrote to the NII to demand a solution that would allow direct deposits of all NII benefits, without any exception, to the bank accounts of Palestinians living in Israel legally. HaMoked transferred to the NII the details of one such case, but emphasized that it was not an isolated occurrence, but a widespread problem, which compels many families to go through a cumbersome bureaucratic process in order to receive money entitled to them by law.
