RBI to banks: Don't present cheques to those on strike

Reserve Bank of India has asked banks that are not participating in the bank strike on Thursday and Friday to not present, on both days, cheques for clearing drawn on banks participating in the strike.

Called by the United Forum of Bank Unions, employees of state-owned and some private banks will participate in the two-day strike protesting the withdrawal of the alternate pension offer and a mere 13 per cent wage hike.

The strike is likely to affect clearing and settlement operations of banks in the country as majority of the clearing houses are operated by the State Bank of India group. There are around 1,050 clearing houses in the country, and over 900 of these are managed by SBI group.

In a letter to banks, the RBI said:

“1. Do not present instruments drawn on the said banks in high value presentation on 6th and 7th Aug 2009.

2. Do not present any cheques in MICR clearing on 5th and 6th Aug 2009 drawn on said banks.”

Banks may, however, participate in clearing from MICR presentation of Aug 7, the RBI said.

“Earlier on June 9, Indian Banks’ Association (IBA) had agreed to 17 per cent wage hike. But on June 17 IBA said it will be 15 per cent and now government is saying 13 per cent,” said Vishwas Utagi, central committee member, All India Bank Employee Association.

The IBA had also agreed to a new pension scheme for bank employees, where 30 per cent of the contribution will be borne by employees, and the rest by banks.

Employees up to chief manager level will participate in the strike. The strike may also disrupt treasury operations of banks, given that back offices will be closed and only senior officials may come to office.

“Volumes will be thin. People are already borrowing for 5-day call today,” said a private bank official.