Bank strike affects operations in 80,000 branches
Bank strike against SBI associates merger hit transactions worth Rs.12,000 crore to Rs.15,000. Treasury operations seen unaffected
New Delhi: Services at around 80,000 bank branches in the country were hit on Friday as employees of public sector banks went on a one-day strike to protest the proposed merger of the State Bank of India (SBI) associates with the parent and other issues.
However, private sector banks like ICICI Bank were working as usual. Most of the public sector banks including SBI had earlier informed their customers of inconvenience if strike materialises.
While the bank strike hit public transactions like cheque clearances, cash deposits and withdrawals, vital treasury operations, including a Rs15,000 crore government bond auction are unlikely to be affected, traders told Reuters.
Staffing in treasuries of banks are likely to be less than normal days but officials will ensure that functions like bidding at the auction will run smoothly, three traders at state-run banks said. “Treasury people have been allowed to enter the head office of the bank, so there is no problem for us in trading or bidding at the auctions,” said a senior trader at a large state-run bank.
However, there could be some issues in some banks settling the previous day’s trades due to thin staffing. “Settlement will be a problem at back office,” said a senior SBI official.
The RBI was also not too worried about the impact of the strike on treasury operations and settlements of banks. “There shouldn’t be any problem. Primary dealers are also there to underwrite if needed. But auctions should go through smoothly,” the official said.
The bank strike has been called by the United Forum of Banks Unions (UFBU), an umbrella organisation of nine unions representing 8 lakh bank employees and officers .
“The All India State Bank Officers’ Federation and the All India State Bank of India Staff Federation are members of UFBU. Thus, it is likely that the bank will also be impacted to some extent by the said strike calls,” SBI had said in a statement.
According to the All India Bank Employees Association (AIBEA) general secretary, C.H. Venkatachalam, normal operations at branches across all PSU banks were affected. The strike proceeded after a conciliation meeting with the Chief Labour Commissioner on 26 July did not yield any positive results.
“Public sector banks (PSBs) are already less profitable and have relatively higher ratios of non-performing assets (NPAs) compared to private sector banks. As such a complete halt of banking transactions following UFBU’s decision to go on strike might result in significant losses,” Assocham Secretary General D S Rawat said. Assocham put the losses between Rs 12,000 crore and Rs 15,000 crore.