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Business News/ Companies / News/  SBI makes U-turn, goes soft on trade unions
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SBI makes U-turn, goes soft on trade unions

Lender backtracks from decision last month to terminate the check-off facility to its officers' federation

SBI’s reversal coincides with Arundhati Bhattacharya, the new chairperson, taking over charge from Pratip Chaudhuri. Photo: Pradeep Gaur/MintPremium
SBI’s reversal coincides with Arundhati Bhattacharya, the new chairperson, taking over charge from Pratip Chaudhuri. Photo: Pradeep Gaur/Mint

Mumbai: State Bank of India (SBI), the country’s largest lender, has reinstated the so-called check-off facility to its officers’ federation, backtracking from a decision last month to terminate the facility that marked one of the biggest management clampdowns on trade union activities by SBI in several decades.

SBI’s management tendered an unconditional apology in Madras high court on 10 October for its action through an affidavit in a contempt of court case filed by trade unions after SBI discontinued the check-off facility on 25 September, days before former chairman Pratip Chaudhuri left office. SBI did so despite a stay from the court.

Under the check-off facility, which was started in 1970, SBI remits the subscription fee from the salary accounts of member officers to the account of the federation on the day of salary payment, typically the 25th of every month. The check-off facility is the lifeline of unions as it ensures regular money flow into union coffers— 100-200 per employee. This money is used to run union activities nationwide.

Typically, at the time of joining, every employee instructs the bank in writing to deduct the sum every month from the salary account. The SBI officers’ federation was formed in 1965 and has 70,000 members, while the bank’s clerical staff has a separate union with 150,000 members.

SBI’s U-turn coincides with Arundhati Bhattacharya, the new chairperson, taking over charge from Chaudhuri.

According to SBI officials and trade union leaders, SBI management remitted the contribution for September on 13 October from a so-called suspense account—an account used by the bank for temporary unclassified transactions till a decision is made about the classification.

“The management has remitted the money to the account of federation for September. They have agreed to deduct the amount from the salary accounts for two months (September and October), from the October salary," said G.D. Nadaf, former general secretary of the All India State Bank Officers’ Federation (AISBOF). B.K. Awasthi, president of AISBOF, confirmed the development, saying that the bank has restored the facility across all circles except in the Lucknow circle.

SBI management’s move to terminate the check-off facility had angered the union, which called it an effort to de-unionize the bank.

A senior SBI official, who too requested anonymity, said the management’s decision to discontinue the check-off facility was “clearly not warranted" as it challenged the basic right of employees to organize.

Bhattacharya, the 57-year-old new chief of SBI, seems to be more tolerant of trade unions. “We are the same team. We have to work together and discuss issues," she said in a press conference on 8 October after taking over.

Chaudhuri had unleashed a major clampdown on trade unions in August last year, taking strict action against officers engaged in trade union activities, including transfers to far-off locations and issuance of chargesheets.

According to AISBOF officials and senior bank executives, the management has transferred about 200 senior office bearers of the federation to far-off locations and issued chargesheets to many others. Some were demoted, with salary increments scaled down.

For instance, in August, SBI management issued chargesheets to 28 officers after the federation staged a nationwide demonstration against the management’s proposed move to enforce a seven-working-day schedule at the bank.

Traditionally, unions have a say in most policy matters at the bank as well as decisions pertaining to staff, including compensation and transfer policies. However, in recent years, unions have steadily lost their voice even among conservative government banks, which are increasingly becoming competitive with their rivals in the private sector.

Experts said the power of trade unions has weakened in recent years due to the advent of technology. “Trade unions are getting marginalized due to higher automation and centralized nature of operations of state-run banks," said Ananda Bhoumik, senior director, banks and financial institutions, at India Ratings and Research, formerly known as Fitch Ratings India.

“The biggest challenge for government-owned banks will be to fill the vacuum which will be created when a large number of employees retire...rather than dealing with trade unions," Bhoumik said.

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Published: 17 Oct 2013, 10:09 PM IST
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