Bank strike today: NEFT, RTGS transactions at public sector banks affected; private banks face cheque clearance delay
The United Forum of Bank Unions has today called for a day-long nation-wide strike to protest the government's bank consolidation and privatisation move. The UFBU is an umbrella body of nine unions, including All India Bank Officers' Confederation or AIBOC, All India Bank Employees Association or AIBEA and National Organisation of Bank Workers or NOBW. The strike has affected over 42,000 branches of 21 public sector banks. The strike has also affected deposit and withdrawal in bank branches, cheque clearance, NEFT and RTGS transactions in these branches. However, operations at private lenders such as ICICI Bank, HDFC Bank, Axis Bank and Kotak Mahindra Bank are expected to be normal except delay in cheque clearances.
Over 10 lakh bank workers, representing 9 PSU bank unions,to be on strike today (visuals from Mumbai) pic.twitter.com/rysBOQwKPL
— ANI (@ANI) August 22, 2017
WHY THE STRIKE AND WHAT ARE THE DEMANDS?
The Unions call for nation-wide strike came in the backdrop of a news that the government was working on a consolidation agenda with a view to creating 3-4 global-sized banks and reduce the number of state-owned lenders to about 12. If the government moves on the plan, the 21 public sector banks would get consolidated to 10-12 in the medium term.
Apart from this, the unions have several other demands such as no write-off policy for non-performing assets or NPAs of corporate loans, declaring wilful default of loans as criminal offense and implementation of recommendations of Parliamentary Committee on recovery of NPAs. NOBW Vice-President Ashwini Rana protested the bank charge hike and said the banks should not pass on the burden of corporate NPAs to bank customers by increasing charges. He further said that the government should compensate for the additional work during demonetisation.
The union also called for the withdrawal of the proposed financial resolution and deposit insurance or FRDA Bill, total exemption of gratuity and leave encashment on retirement. It also says that the government should abolish the Banks Board Bureau and ensure stringent measures to recover bad loans and accountability of top executives. The Union suggested that around one million bankers working in around 132,000 branches would be part of this strike.
BANKS THAT ARE AFFECTED TODAY
Except the State Bank of India, no other public sector bank has made any official announcement. However, it is expected that all public sector banks will be shut by this strike. Speaking to Business Today, All India SBI Officers' Co-ordinating Committee President M S Jaishankar said : "No work will take place across public sector banks as they will remain locked." Earlier in a regulatory filing in the BSE, the State Bank of India had said: "All India State Bank Officers' Federation and All India State Bank of India Staff Federation, being part of UFBU (United Forum of Bank Unions), will also participate in the strike. It is likely that our Bank would also be impacted by the said strike." All Public-Sector Banks: Allahabad Bank, Andhra Bank, Vijaya Bank, Bank of India, Bank of Baroda, Bank of Maharashtra, Canara Bank, Central Bank of India, Corporation Bank, Dena Bank, Indian Bank, Indian Overseas Bank, IDBI Bank, Oriental Bank of Commerce, Punjab & Sindh Bank, Punjab National Bank, State Bank of India, Syndicate Bank, UCO Bank, Union Bank of India and United Bank of India
National Org of Bank Workers has said that the strike is against Govt policies of privatization & merger
— ANI (@ANI) August 22, 2017
BANKS THAT ARE OPEN TODAY
Today's strike will affect only state-run banks and operations at private lenders like ICICI Bank, HDFC Bank, Axis Bank and Kotak Mahindra Bank are expected to be normal. However, since the public sector banks are closed that could affect the cheque clearances. All Private-sector banks: Axis Bank, Bandhan Bank, Catholic Syrian Bank, City Union Bank, DCB Bank, Dhanlaxmi Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC Bank, IndusInd Bank, Jammu and Kashmir Bank, Karnataka Bank, Karur Vysya Bank, Kotak Mahindra Bank, Lakshmi Vilas Bank, Nainital Bank, RBL Bank.
South Indian Bank, Tamilnad Mercantile Bank amd YES Bank
WHY IS THE GOVERNMENT GOING FOR CONSOLIDATION
Earlier in April, Reserve Bank of India governor Urjit Patel said that the Indian banking system could be better off if some public sector banks are consolidated to have fewer but healthier entities as it would help in dealing with the NPAs. According to reports, that bad loans of public sector banks had gone up by over Rs 1 trillion to Rs 6.06 trillion during April-December of 2016-17.
Last year during budget speech, Finance Minister Arun Jaitley said that the government had started the process of transformation of IDBI Bank and would look at bringing down government's stake in the bank below 51 per cent. Earlier this year, the government again said that it was examining the possibility of further consolidation in the public sector banking space. Multiple news agencies reported that Punjab and Sind Bank could be merged with Punjab National Bank and Bank of Baroda could take over Indian Overseas Bank. Similarly, Dena Bank could be merged with some large banks like South Indian bank.