Israeli banks profit from illegal West Bank settlements, rights group says

Most of Israel's largest banks are helping build illegal settlements in the Palestinian West Bank by providing financial services to home buyers and local councils, Human Rights Watch said in a new report on Tuesday.

The report said that bank activities in or with settlements have helped encourage settlement growth and "contribute to rights abuses" against Palestinians.

"Israeli banks are partnering with developers to build homes reserved exclusively for Israelis on Palestinian land," said Sari Bashi, Israel and Palestine advocacy director at Human Rights Watch. "The projects these banks underwrite contribute to displacing Palestinians unlawfully."

HRW said Israeli banks, and international banks doing business with them, may be engaging in pillage, by acquiring ownership interests in housing projects on seized land.

Because of an Israeli law limiting the amount of money developers can collect from buyers in advance, banks often become direct partners in settlement projects, the report said.

"Most Israeli banks finance or 'accompany' construction projects in the settlements by becoming partners in settlement expansion, supervising each stage of construction, holding the buyers' money in escrow, and taking ownership of the project in case of default by the construction company," the report said.

Banks cannot do business in settlements without contributing to discrimination, displacement, and land theft.

Israel captured the Gaza Strip, West Bank and east Jerusalem in the 1967 war. West Bank settlements are now home to around 400,000 Israeli settlers. An additional 200,000 Israelis live in east Jerusalem, which Israel annexed in a move that is not recognised internationally. It withdrew from Gaza in 2005 although still enforces a border blockade.

Most of the international community considers settlements illegal and an impediment to the creation of an independent Palestinian state. 

HRW called on Israeli banks to stop providing services to housing in settlements and close their branches there.

"Banks cannot do business in settlements without contributing to discrimination, displacement, and land theft," Bashi said. "To avoid this outcome, they should end their settlement activities."

Human Rights Watch said Israeli banks did not respond to requests for comment. The Association of Banks in Israel, an umbrella group representing major Israeli banks, declined to comment on the report.

In February this year, the United Nations said it was reviewing more than 200 companies suspected of business practices linked to illegal settlements.