Banking operations paralysed due to nationwide strike

The unions in the banking sector had given the strike call to protest the mergers in the sector, infusion of private capital in govt banks and others

Banking operations across the country were hit on Friday as around 1 million employees in around 40 private and nationalised banks struck work for a day to protest against the central government's policies for the sector.

"The strike has evoked a good response nationwide as around 1 million have participated in it. Most of the nationalised banks are closed," C H Venkatachalam, General Secretary of the All India Bank Employees Association (AIBEA), told IANS in Chennai.

Echoing this, K Thamaraiselvan, General Secretary of Andhra Bank Employees Union (Tamil Nadu unit) said: "The banking operations have been paralysed nationwide."

The unions in the banking sector had given the strike call to protest the mergers in the sector, infusion of private capital in government banks and others.

The strike call was given by the United Forum of Bank Unions (UFBU) an umbrella body of nine unions in the banking sector viz., AIBEA, AIBOC, NCBE, AIBOA, BEFI, INBEF, INBOC, NOBW and NOBO.

"The strike involved around 1million employees and officers of public sector banks, old generation private banks and foreign banks totalling more than 80,000 branches," Venkatachalam said.

According to Venkatachalam, unmindful of the adverse implications, the government was pursuing the reform measures in the banking sector like inadequate infusion of capital in public sector banks, which will result in reduction of government's equity capital and create compulsion for higher extent of private capital leading to privatisation of banks.

"In the last 40 years, more than 40 private banks have collapsed. We cannot allow to take that risk again. Banks must continue in public sector in national interest," he said.

According to him, the total deposits in the banks today are more than Rs 116 lakh crore and this cannot be placed at the doors of private players by privatising the banks.

He said the government wants to consolidate and merge 27 public sector banks to make them into some five or six big banks for the sake of global competition.

"We need efficient banks and not necessarily big banks. Big banks do not automatically mean strong banks. In many countries big banks have failed and they are in trouble," he added.

He said privatisation of banks will not help in recovering bad loans totalling over Rs 13 lakh crore and may result in handing over the banks to a loan defaulter.

Criminal action against wilful loan defaulters should be taken instead of dealing with them with a velvet hand, he added.

Meanwhile, industry body Assocham on Friday urged UFBU to call off their strike as customer transactions worth about Rs 12,000 crore-Rs 15,000 crore would be affected.

"Public sector banks (PSBs) are already less profitable and have relatively higher ratios of non-performing assets (NPAs) compared to private sector banks, and such a complete halt of banking transactions following UFBU's decision to go on strike might result in significant losses," D.S. Rawat, secretary General of The Associated Chambers of Commerce and Industry of India (Assocham) said in a statement in New Delhi.

"With a view to revamp the functioning of the PSBs, banking sector reforms is the need of the hour," he added.