Bank staff strike work to protest consolidation

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About 400,000 bank employees went on strike on Wednesday to protest merging state-owned banks, partially affecting cash transactions and clearing operations, a bank union official said.

Employees were also protesting the ongoing move to merge State Bank of Indore with its founder State Bank of India, the country's largest bank.

"We are going ahead with strike as conciliation talks with bank management last evening failed," CH Venkatachalam, general secretary of All India Bank Employees Association (AIBEA) told Reuters over telephone.

"Merger of banks is in nobody's interest. We need more banks in the country," he added.

India has been urging state-owned banks to merge with each other to benefit from synergies and create fewer bigger players in the sector. The government and central bank have said that any such moves have to be voluntary on the part of banks.

Operations in branches and clearing may be partially impacted owing to the strike, BA Prabhakar, executive director, Bank of India.

Options like automated teller machines (ATMs) to meet immediate cash requirements will minimise the impact in clearing operations, said MD Mallya, chairman and managing director at state-run Bank of Baroda. Treasury operations remained unaffected, said traders.

"Clearing activity is affected on account of this strike, it will therefore affect retail business but the overall market activity is brisk. Even money market activity is normal," said RK Gurumurthy, head of treasury at ING Vysya Bank.

All India Bank Officers' Association and AIBEA, earlier, served a notice to Indian Banks Association, the apex banker's body, informing its members working in state-owned, private and foreign banks would strike work on Dec. 16.

Earlier on Aug. 6 and 7, unions representing about 900,000 employees in state-owned banks went on strike for higher wages and pension, impacting cash transactions and foreign exchange trading volumes for two days.

Following several rounds of negotiations Indian Banks Association and United Forum of Bank Unions (UFBU) have reached an understanding for a 17.5 per cent wage hike for the employees in banks, IBA officials said.