Strike cripples banking activities

Close to one million bank employees took part in a nation-wide strike today, paralysing banking transactions across the country. Bank employees fear job losses as the government pushes for consolidation among public sector banks.

Transactions slumped today in Mumbai with only 52 banks out of an average of 115 participating in high-value clearing of cheques. High-value clearing involves wholesale and inter-bank transactions with a value of over Rs 1 lakh.

About 4,050 cheques amounting to Rs 1,657 crore were presented today for clearing, said Reserve Bank of India (RBI) officials.

The financial markets were also quiet today with just foreign banks active in the foreign exchange market and the debt market witnessing thin volumes compared to the average traded volume of Rs 2,000-3,000 crore.

The rupee eased to 43.7350/7450 a dollar, from the previous close of 43.72/72. The yield on the benchmark 10-year bond rose one basis point to 6.7150 per cent. The United Forum of Bank Unions (UFBU), an umbrella organisation of four industry-level officers' associations and five workmens' unions, had called the strike.

The unions were protesting against the policy relating to mergers and acquisitions of public sector banks and investment in Indian banks by foreign banks/institutions and investors.

The Union finance minister has been encouraging mergers in the public sector banking industry in order to create large global players. There has been political opposition to this and the government is expected to go slow.

Said K K Nair, general secretary, Indian National Bank Officers' Congress (INBOC), "We have written to the Prime minister and the finance minister on the reasons for our agitation but we have not got any response. We will decide whether to call another strike or not depending on the government's response."

The bank officers' associations feel that mergers will lead to closure of branches and give a unfair advantage to private and foreign banks. They are also opposed to the recent RBI policy to permit foreign banks to take over ailing private sector banks.

The unions that took part in the strike today include the All India Bank Officers' Confederation, All India Bank Officers' Association, Indian National Bank Officers' Congress, National Organisation of Bank Officers and five industry-level workmen unions namely All India Bank Employees' Association, National Confederation of Bank Employees, Bank Employees' Federation of India, Indian National Bank Employees' Federation and National Organisation of Bank Workers.