The Indian banking sector has been witnessing several reforms in recent times. The Central Government has been coming out with several path-breaking measures in recent times aimed at addressing the liquidity crunch in the banking sector while also creating more capable and agile entities instead of multiple banks struggling with NPAs and other factors.
Yes, you guessed it right! The landmark decision to go ahead with mergers of 10 PSBs (public sector banks) into four entities has been announced by the Government. However, a large section of bank employees have been protesting this decision and hence a bank strike will take place this week accordingly.
Here’s what you should know about the strike
- Most branches of banks will operate for just 3 days.
- In case of the two-day bank strike called by bank officer unions attains success, then most Indian banking branches will remain shut for four days in succession from 26th September to 29th
- Two days of strike will come before two weekly holidays.
- AIBOC (All India Bank Officer’s Confederation), INBOC (Indian National Bank Officer’s Congress), AIBOA (All India Bank Officer’s Association) and NOBO (National Organisation of Bank Officers) have called for this strike from 26th to 27th September, 2019.
- The strike has been called as a protest against the merger of 10 public sector banks into 4 larger banking entities.
- The strike has been announced strategically for Thursday and Friday and 28th September will anyway have banks shut since it is the month’s 4th Sunday is a weekly holiday for banks.
- This four-day shutdown will naturally impact the entire banking sector this week as most branches may open shutters for just three days.
- 30th September, Monday, may be the next working day post 25th of September, 2019.
- Cheque clearances may be impacted considerably in tandem with ATM services.
- Customers will not be as badly affected in the future once RTGS and NEFT become operational on a 24-7 basis from December this year.
- NEFT and RTGS are presently available between 8 AM and 7 PM on working days with the exception of the 2nd and 4th Saturdays of each month.
- With the two-day banking strike not covering any holiday, online NEFT/RTGS/UPI/IMPS transactions and internet banking should certainly be available.
- The unions have also threatened a strike which is indefinite in the month of November in order to protest against the mergers in the banking sector while also raising their demand for a hike in salaries.
- AIBEA (All India Employees’ Association) and BEFI (Bank Employees Federation of India), two other unions for employees, have also declared a one-day bank strike on the 22nd of October, 2019, protesting against the merger decision.
Why Indian bankers are opposing this decision
The merger of 10 PSBs into 4 bigger entities, as per AITUC, which has supported the call for a strike, is meant at giving more breathing space and headroom to the private sector in banking. This is what AITUC and banking unions are protesting against and it is also preparing for a workers’ convention nationally for opposing these policies which are being termed as pro-corporate and anti-people. The Government announced its decision pertaining to mergers on the 30th of August, 2019 and there have been major protests led by common citizens, banking employees and officers and also other sections of society.
The Government remains convinced about the benefits of such mergers and hence the decision by officers to go on a strike on 26th and 27th September followed by an indefinite strike from mid-November in case the plan is not called off. The previous mergers, as stated by AITUC, have not really led to major gains since overall bad loan percentages have not reduced according to the organization. Other factors cited by protestors including the lack of a favorable lending position after mergers along with closure of several branches and mix-ups in seniority positions of several employees.
The union has already stated that the Government’s claim about increasing bank size to bring them on a level playing field with global banking giants is doubtful in terms of benefits or impact since total capital of PSUs will still be lower than global biggies. They have also stated how rural markets and farmers require smaller bank branches in villages and far-off areas as opposed to larger banks.