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A nationwide two-day strike by employees protesting nominal wage hike has interrupted banking services across the country. ATMs are expected go out of cash later in the day and things may just get tougher as bank branches have stopped servicing withdrawals and cash deposits.
About 10 lakh employees from over 80,000 branches of 21 public sector banks have gone on the two-day strike beginning Wednesday. Employees from about seven foreign, and nine private sector banks are also part of the protest. Government banks alone account for over 70 percent of the total banking business.
The strike is in protest of the marginal two-percent wage hike given to bank employees, who have demanded revision similar the approximately 15 percent raise doled out last time. The demand has also got the support of the top management of banks.
“Given the backing of digital transactions and many of our customers having adapted to it, the strike has been relatively less stressful. But the ATMs may soon dry up as we cannot supply the cash from our branches,” said a bank executive of a small public sector bank.
Services such as cash deposits, withdrawals at branches as well as ATMs, and clearing of cheques are likely to be impacted. With the protests happening at the end of the month, there are also fears of salary withdrawals getting affected.
Most of the banks, including State Bank of India (SBI), Punjab National Bank (PNB) and Bank of Baroda (BoB), have already informed their customers that functioning of branches and offices will be impacted if the strike takes off.
However, the functioning of private banks like ICICI Bank, HDFC Bank, Axis Bank and Kotak Mahindra Bank is expected to be normal except for delays in cheque clearance.
The disagreement
The United Forum of Bank Unions (UBFU), the umbrella body of various bank nine unions, is leading the strike.
“The gross profit of the banking system is Rs 1.58 lakh crore, out of that 70 percent is towards bad loan provisions. I am concerned with operating profit and we work hard for it. You cannot deny me that right," said S Nagarajan, General Secretary, All India Bank Officers’ Association (AIBOA).
"We also asked the IBA (Indian Banks' Association) not to delink the wage negotiations for bank officers in the Scales 4-7. The IBA did not do anything,” he added.
Apart from the demand for an early wage review settlement, the UBFU has also asked for the inclusion of all officers up to scale VII in the review.
Wage revisions are usually done after discussions between the unions and the IBA. The two then release a joint note, which is an agreement signed between the IBA and the officers' associations.
Since 1979, the agreement has covered officers between scale 1-7.
“Suddenly, six banks (SBI, BoB, PNB, Union Bank of India, Oriental Bank of Commerce and Indian Bank) have negotiated to give the wage revision to officers up to Scale 4 only, that is not democratic… Even the Chief Labour Commissioner has backed us,” Nagarajan said, adding that among 19 banks, a majority should prevail and not the mandate of six banks.
In the last wage revision in 2012, which was for the period between November 1, 2012, and October 31, 2017, bank employees got a 15 percent wage hike.
In the May 5 meeting with the unions, the IBA proposed a two percent hike in the wages for the bank employees owing to the growing pain in almost all the banks’ balance sheets.
The revised wage revisions are due from November 2017.
"The 2 percent of wage increase offered is not at all acceptable to the unions/federations, considering the rise in cost of living…We had requested the IBA to come up with a better offer than the mere two per cent hike offer made earlier," said C H Venkatachalam, General Secretary of All India Bank Employees’ Association.
The IBA could meet the unions on June 12 to restart wage negotiations. But this is yet to be confirmed.
Backing from senior management
Most banks including SBI and Bank of Baroda have made a provision (capital set aside for potential outlay) towards the wage revision to the extent of 7-10 percent.
A CEO and managing director of a mid-sized bank said, “I do feel the wage hike is less, maybe a 7-10 percent should be reasonable…Last revision was at 15 percent and given the rise in the cost of living, I think the IBA should talk it out and try to commensurate or be close the past hike, it is only logical enough to give them a better pay.”
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