Two days before one million bank employees in India were to go on their longest strike in five decades, the Narendra Modi government saved its face by agreeing to work on an amicable solution by February—thus persuading them to call it off.
The strike called by the employees of public sector banks, which account for 75% of India’s bank operations, was to be held from Jan. 21 to Jan. 24.
“The six-day shutdown of the banking sector was the longest we had planned since 1966. We planned it in such a way that the four-day strike coincided with a Sunday and a public holiday,” AK Ramesh Babu, president of the Bank Employees Federation of India, told Quartz. While Jan. 25 is a Sunday, India’s Republic Day falls on Jan.26, which is a national holiday.
The workers, who are demanding better pay and working conditions, have been negotiating with the Indian Banks’ Association (IBA), a body comprising the top management representatives of banks. On Jan. 19, after two days of negotiations, the IBA agreed to amicably settle the matter by the first week of February.
“The government clearly felt the need to dissuade us from doing this,” Babu said.
A persistent problem
“If there is no satisfactory outcome, fresh dates for a four or five-day strike in February would be announced,” MV Murali, a convener for the United Forum of Bank Unions, said. The public sector bank employees have also threatened an indefinite strike from Mar. 16 if a deal is not signed.
Public sector banks account for 77% of the total deposits in India, and in Mar. 2014, their total capital stood at Rs5,65,200 crore ($91.5 billion). While they command 72% of India’s banking market share, they often face government interference in their operations.
Public sector bank employees, in the officer and clerical posts, want a 19.5% hike in their salaries, but their pay masters, the IBA, is only willing to give them a 12.5% increase.
“In the eighties, joining a bank in India was similar to a Class-I employee of the central government. Today, we have one of the largest banking systems in the world, yet we are extremely underpaid and made to work over time,” Babu told Quartz.
Long march to revised salary
Bank employees have been demanding a wage hike since Oct. 2012 when their previous pay contracts expired. Since then, they have held frequent one or two-day strikes.
In January this year, the unions brought down their wage hike demand from 40% to 19.5% following negotiations between the bank employees and the IBA. In 2010, the IBA had revised wages by 17.5% for the 2007-2012 period.
“Their demands are genuine. There is a massive disparity in the pay scale in public sector banks as compared to private sector ones which clearly affects their efficiency and productivity,” said Abizer Diwanji, national leader for financial services at the consultancy firm Ernst & Young.
“We are willing to stretch it to a maximum of 19.5%. If we could come down from 40% to 19.5%, the management can increase it from 10% (the IBA’s initial offer),” said another union leader, who did not want to be identified.
With operations at public sector banks being regularly disrupted, private sector banks in India have been steadily increasing their market share in recent times. Also, according to the Reserve Bank of India (RBI), 4.36% of assets held by public banks are non-performing, while the same was at 1.73% for private sector banks, signalling an urgent need for overhauling the system.
“Public sector banks have lower profitability and productivity ratios than their private sector competitors. They have lost significant market share, and their asset quality is much weaker—in some cases worsening to grave proportions,” the RBI had said in May 2014.
While promising minimal political interference, the Modi government has said that it intends to reform India’s public sector banks. Perhaps it should begin by listening to the people who help run them.
Defer Proposed Four-Day Bank Strike-NDTV
New Delhi: PSU bank employees' unions have deferred the proposed four-day strike from January 21 after the management of banks (IBA) assured that wage related issues will be resolved by early February.
"Four-day strike has been put on hold as Indian Banks' Association (IBA) assured that wage issue will be resolved by the first week of February," United Forum of Bank Unions (UFBU) convener M V Murali said.
Earlier in the day, employees unions had announced that they will go on a 4-day strike from January 21 to protest against the "rigid and callous attitude" of Central Government in resolving the long pending wage revision issues.
On request of the bank management, IBA, for continuation of dialogue for wage negotiations, it was decided to defer the bank strike, Ashwini Rana, General Secretary of National Organisation of Bank Workers, said.
Mr Murali said, "If there is no satisfactory outcome fresh dates for four to five days strike action in February would be announced."
The wage revision of public sector bank employees has been due since November 2012.
The unions had deferred one-day strike scheduled for January 7 as IBA improved the wage hike offer to 12.5 per cent from 11 per cent earlier. The unions are demanding a wage hike of 19 per cent.
The UFBU is the umbrella organisation of nine bank employees and officer unions while IBA is association of public and private lenders.
According to Mr Rana, there were differences over deferment of strike by unions. Some of the unions were against deferring the strike.
Last year in December, the bank employees' unions had gone on four-day rotational strike to press for their demand.
There are 27 public sector banks in the country with combined employee strength of about 8 lakh. There are about 50,000 branches of these banks across the country.
ALL INDIA BANK EMPLOYEES' ASSOCIATION
Mumbai/ 19-1-2015
Bank strike deferred
C H Venkatachalam, Gen. Secretary, AIBEA
The proposed 4 days’
continuous strike by 10 lacs bank employees under the banner of United Forum of Bank Unions
has been put on hold and deferred.
During the last round of meeting held on 6th instant, IBA improved their offer of wage
increase from Rs. 3465 crores to Rs. 3938 crores i.e. from 11% to 12.5%. Though it is not an acceptable offer, since
IBA offered further improvements during further negotiations, the proposed
strike on 7th instant was deferred.
Further discussions have
continued in the Sub-Committees on 14th and 19th instants wherein issues
other than wage increase and pertaining to other service conditions like
introduction of a better medical expenses reimbursement scheme, five days
banking, regulated working hours for officers, leave benefits of employees,
etc. have been discussed.
In the meantime, IBA today assured
to hold further talks during first week of February, 2015 and continue the
negotiations. Hence, in the interest of
the banking public, the 4 days strike has been deferred and put on hold till
further talks. We expect that this
goodwill be reciprocated by the Government and IBA and that they would expedite
the settlement with fair increase in wages which is pending for more than 2
years. Otherwise Unions would be constrained to revive the strike call.
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