Story in pictures: A 2% pay hike that crippled country's banking business

Banking operations across the public sector banks have come to a halt as a result of two-day strike on May 30-31 organised by the employees against a wage increment offered by IBA.

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The Indian Banking Association’s decision of giving a 2% salary hike to the public sector banks’ employees has created a furore among them. In the last wage revision done in 2012, the wage increase was 15%. This time, the employees were expecting a better increment.

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Nearly one million bank employees across the nation have participated in the strike. Public sector banks account for almost 70% of the banking operations in India. The cheque clearances at private sector banks like ICICI, HDFC, etc. have taken a hit too because of the strike.

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The strike has taken place at the end oft he month, and may impact salary withdrawals. Other banking services such as deposits, credit, renewal of fixed deposits, government treasury operations and money market operations would get impacted too. ATMs around the country may also run out of cash because of the strike.

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Associations that have called the strike called the meagre increase of 2% in salary as an insult to the public sector banks’ employees. Public sector banks contributed majorly to the success of the schemes like Jan Dhan Yojana and Demonetisation. Therefore, they consider this raise as inappropriate and unjustified.

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Out of the 21 public sector banks, 19 have reported losses for the quarter January-March 2018. The cumulative loss of the public sector banks is around 630 billion. Punjab National Bank, recently in news for the “Nirav Modi” fiasco, has reported the highest loss with SBI coming second.