BackBank strike hits cash transactions, foreign exchange trading volumes
Bank strike hits cash transactions, foreign exchange trading volumes
PremiumMumbai: Employees of state-run banks, including the country’s biggest lender State Bank of India (SBI), began a two-day strike on Thursday for higher wages and pension, affecting cash transactions and foreign exchange trading volumes.
Bank unions representing about 900,000 employees in state-run banks and old generation private sector banks went on a strike after talks with the Indian Banks’ Association, the apex body representing bank management, failed on Tuesday.
The union members will meet again on 11 August to plan the future course of action, he said. Striking banks include major names such as Canara Bank and Corporation Bank, apart from SBI.
India has 80 commercial banks, including 29 foreign banks, and nearly 3,000 urban and rural cooperative banks. State-run banks as a sector corner 55% of all assets.
The strike hit cash settlements, cheque clearing activities, treasury operations and volumes in bond and currency markets, though senior bank officials said preparations had been made to ensure availability of funds.
“ATMs are full with cash and I hope common people would not be affected for these two days," said M.D. Mallya, chairman and managing director at state-run Bank of Baroda. There are more than 40,000 ATMs in the country.
In most parts of the country, operations were largely normal in private sector banks such as top private sector lender ICICI Bank Ltd and HDFC Bank Ltd.
Volumes in the stock market were average but trading in bond and currency markets were hit as state-run banks— the biggest players in the market—stayed away from active participation.
“The major players are out of the market today, there is only back-to-back merchant covering happening," said Naveen Raghuvanshi, associate vice-president at Development Credit Bank Ltd.
Domestic gold trading remained thin as banks, primary sellers of gold, were shut due to the strike, dealers said.
Dealing rooms at state-run banks were thinly staffed as traders stayed away from their terminals and volumes in government bonds were only Rs1,465 crore, a fraction of the Rs4,350 crore traded on Wednesday.
The partially convertible rupee moved in a tight band of 47.56-47.73 per dollar for most of the trading day.
A senior trader at a private bank pointed out that foreign exchange transaction volumes were 30-35% of the usual average daily volume.
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