By Devangi Narang
Services at public sector banks were hit on the 22nd August 2017 due to a nationwide strike by the employee unions to protest against government’s proposed consolidation and privatization of public sector banks. Twenty-one public sector banks, including State Bank of India (SBI) and Industrial Development Bank of India (IDBI), saw major disruption in operations due to this reason. The strike had been called by unions under the aegis of the United Forum of Bank Unions (UFBU), an umbrella body of nine unions, including All India Bank Officers’ Confederation (AIBOC), All India Bank Employees Association (AIBEA) and National Organisation of Bank Workers (NOBW).
Indian Banks’ Association, an industry body, had asked banks to take measures in advance to minimise the impact of the strike. C.H. Venkatachalam, General Secretary of AIBEA, said in a statement on Monday that nearly 1 million bank employees across all 21 public sector banks will go on strike. These 21 public sector banks control 75 per cent of the total business. The strike impacted State Bank of India majorly as two of its unions had decided to participate, the bank had informed exchanges on Saturday.
Demands of the unions
Nearly 10 lakh bank employees participated in the strike. The government is looking to reduce the number of public sector banks to 10-15, through a series of mergers and acquisitions. The body’s other demands included criminal action against wilful default of bank loans, implementing recommendations of the parliamentary committee on recovery of NPAs, abolishing Banks Board Bureau, reimbursement of expenses incurred during the demonetisation and Jan Dhan campaigns, and removal of Gratuity Ceiling under Payment of Gratuity Act, 1972.
Besides the above demands, the union also wanted withdrawal of the proposed financial resolution and deposit insurance (FRDA) Bill, total exemption of gratuity and leave encashment on retirement. The body is also against passing the burden of corporate NPAs on bank customers by hiking charges. The unions are demanding adequate capital support to banks instead of pushing them to raise funds from private players, as this would result in dilution of governments stake.
Huge backlash for the banks
Bank customers were hit hard by the strike as, despite digitisation of banking services, a large number of customers are still dependent on manual bank operations. Cheque clearances, NEFT/RTGS transactions as well as deposits/withdrawals at branches of public sector banks were affected. However, online banking transactions were not impacted. Moreover, the critical operations of public sector banks like data centres remained open to facilitate online transactions. Operations at private sector lenders such as ICICI Bank, HDFC Bank, Axis Bank and Kotak Mahindra Bank were normal except the delay in cheque clearances.
In an attempt to make a more lasting impact and to ensure that their concerns are addressed by the government, the United Forum of Bank Unions (UFBU) plans to conduct a massive rally on September 15th. It also plans to conduct a continuous strike for two days sometime in October or November.
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