Bank strike: Services crippled, unions protest reforms
New Delhi: Services in the public sector banks were hit as staff and officers belonging to some unions on Wednesday went on a two-day strike protesting against reforms in the sector, outsourcing of non-core services to private sector and demanding pension revision among others.
Normal banking operations, including cash transactions, cheque clearances, foreign exchange dealings were affected.
Customers were depending more on the ATMs as the bank managements had made advanced arrangement for loading the machines with cash.
"Several banks, including SBI, have outsourced cash- loading business with private firms. Most of the ATMs have enough capacity," a senior SBI official said. However, the fund movement of individuals and corporates would get affected because of delays in cheque clearances.
Besides, the volumes in the government bond market and share markets were also impacted.
"The strike today has been a success all over the country. Banking services have been affected and paralysed," All India Bank Employees' Association (AIBEA) General Secretary C H Venkatachalam said in a statement.
He said employees of 24 public sector banks (PSBs) and 12 private banks participated in the strike.
However, ICICI Bank and HDFC Bank services were not affected.
Unions are protesting against banking sector reforms such as the Banking Sector Laws Amendment Bill which seeks to remove restrictions on voting rights of foreign shareholders and increase voting rights of private investors in the PSBs.
Nearly 10 lakh employees and officers all over the country participated in the strike, which will continue on Thursday as well, AIBEA said.
The impact was felt the maximum in West Bengal and eastern states, while the Shiv Sena affiliated unions in Mumbai did not participate in the strike. In the national capital the impact was significant.
According to an official of the Indian Banks' Association (IBA), at least 90 percent of public sector bank employees and old generation private sector banks participated in the strike.
Fund flows to the stock market were also affected as clearing operations were hampered. However, banking scrips ended largely unchanged in today's trade.
"The loss to the national economy on account of the 2-day strike could be around Rs 30,000 crore.
Besides, employees stand to lose about Rs 300 crore due to non-payment of salary," President of All India Bank Officers Association (AIBOA) S S Shishodia said.
Unions went ahead with the strike after reconciliatory talks between them and the government failed on Tuesday.
Trading in the forex market was lacklustre, as the largest player State Bank of India (SBI) did not participate.
"Volume and liquidity in the forex market is low as many of the public sector banks are not there due to the strike," Currency Strategist of Geojit Comtrade, Hemal Doshi said.
Meanwhile, industry body Assocham has asked the bank unions to withdraw their strike on Thursday saying the strike is causing loss to the economy.
The Banking Laws (Amendment) Bill, 2011 is before Parliament and is likely to be taken up in the current session.
General Secretary of National Organisation of Bank Workers (NOBW) Ashwani Rana said the government, so far, has not approached them for withdrawing the ongoing strike.
"All public sector banks were affected as a result of the strike. None of our branch could work properly today due to the two-day strike and I do not see much improvement for tomorrow," a senior official of State Bank of India said.
In order to minimise the impact of the strike for normal customers, the official said, ATMs (automated teller machines) were filled up last evening itself and the bank expects them to last for 2 days.
Additionally, the increasing usage of Internet banking will also help reduce the impact, the official said.
So, even though executive-level staff is reporting to work and opening the branches, there is no business per se as the vault remains locked, the official said.