Major public sector banks, including the largest lender SBI, were on Wednesday forced to scale down their forex activities to minimal levels, apart from limiting their treasury operations to skeletal dealings both in debt as well as equities space following the two-day national strike called by their employees.
Mumbai: Major public sector banks, including the largest lender SBI, were on Wednesday forced to scale down their forex activities to minimal levels, apart from limiting their treasury operations to skeletal dealings both in debt as well as equities space following the two-day national strike called by their employees.
As large sections of lower level officers of public sector banks (PSBs) were absent in the dealing rooms and branches were shut, treasury operations were only limited to Government securities and equities which saw some 35 percent drop in volumes. The forex dealings were also affected.
A senior official from SBI, the largest dealer in all these spaces, said that "since most of the public sector bank employees were on strike, we were affected. However, we did some deals in the forex market along with debt and equities to the extent possible for us during the day."
He did not, however, offer any numbers to quantify the loss of business due to the stir called to oppose banking sector reforms and outsourcing of non-core activities.
Another official from a mid-sized PSB said their operations were limited to Government securities and equities, which were carried out with the help of senior officials.
"However, normal market transactions were a low key affair as lower level officers were absent," he said, adding forex market operations were almost nil.
"Normally, we take positions after taking into account the commitment of branches with respect to lending towards import or exports. As the branches are shut today, we were not able to take a position in the forex market," he said.
Traders active in the forex market also had a similar view.
"Due to the strike, most PSBs stayed away from the forex market. The volume was thin and there were swift movements in the rupee even with a small order," currency strategist at Geojit Comtrade Hemal Doshi said, adding even clients are also not in the market due to the strike.
He said things are likely to be on the same line tomorrow, the second and last day of the agitation.
Referring to the treasury and clearance operations, another top level public sector official said that while treasury operation was subdued, clearances had been severely hit due.
"Cheque clearances were hit as bank branches remained shut in majority of areas," she said.
The bank officials declined to put a number to the amount of loss that the lenders had to face due to the strike.