Hundreds of Gaza residents started lining up outside the Ar-Rimal branch of the Arab Bank in Thursday morning, the day after an announcement by the administration that two of the three Gaza Strip branches would close.

In a statement, the bank announced that "in light of worsening conditions under which the Bank is called upon to operate in Gaza and after having recently reduced the number of its staff there, it has also decided to close two of its three branches."

Mazen Abu Hamdan, Country Manager of Arab Bank Palestine, said in the statement that, "We regret these decisions, but it is becoming difficult in the present environment to maintain our high standards of operation." The Khan Younis and central Gaza City branches were set to be closed, with the Ar-Rimal area branch the only remaining Arab Bank in the coastal enclave.

In response, the PA Monetary Authority told Ma'an that it imposed the largest fine in the ministry's history on the bank, for failing to obtain ministry approval for the closures under Article 49 of the Monetary Authority law and Article 10 of the Banking law.

The PA issued a statement mid-morning on Thursday, assuring all customers that the bank would continue to operate and would be stabilized as part of the Palestinian banking system.

As the situation remains unclear, Gaza residents have lined up outside the remaining branch, telling reporters they were set to withdraw all their cash in case the bank fails.

Officials told Ma'an that the remaining two branches have not yet closed their doors, and can access their accounts via any of the three branches for the rest of the week.

The closures come just a week after the Arab Bank announced lay offs effecting more than 100 staff members, who were given forced retirement packages and severance pay.

In its statement, Abu Hamdan said he "regrets the hardship that this closing has caused to its dedicated staff, and will fairly compensate them in recognition of their years of service and commitment."

While the bank indicated that it hoped "circumstances affecting Gaza will improve in the near future and it will then be able to reinstate full operations there."