Sbi Strike Leaves Corporates In A Jam

The strike in all SBI branches in Maharashtra and Goa entered its third day yesterday, even as corporate India prepared for a worst-case scenario of the strike escalating to the national level.

The strike has already come close to precipitating a corporate crisis, with funds flow being severely impaired. Individual depositors are also feeling the pinch with other commercial banks declining to accept cheques drawn on SBI because no clearing is taking place.

All India State Bank Officers Federation (AISBOF) representatives yesterday told Business Standard that they would proceed with their proposed strike at 13 local head office centres (covering 75 per cent of SBIs business) today. Informal talks were held between the unions representatives and the SBI brass in Calcutta yesterday. However, the stalemate could not be broken with AISBOF refusing to budge from its demand of immediate lifting of the suspension of three SBI officials.

 

The SBI brass reportedly wants some more times to complete its investigations. However, AISBOF sources alleged that the SBI management is under pressure from the government and RBI to effect a cover-up operation and the suspension is a move to divert public attention from the real culprits.

In case the strike escalates to an all-India level, the functioning of the financial system will be severely affected. A cross-section of Indian industry, including oil majors, will also be affected since a majority of them are SBI clients.

SBIs forex operations, which are based in Calcutta, have not been affected so far. However, if the strike spills over to the national level, SBIs forex operations could be paralysed. This would affect oil majors adversely, since SBI reportedly bought $50 million in the recent past on their behalf.

The absence of SBI, which often offers two-way quotes, could lead to a stronger rupee since SBI is generally a buyer in the forex in the market.

All cheques, drafts and bank instruments drawn on SBI branches of Maharashtra are being refused by banks all over the country. A top official of the SBI main office in Calcutta said, We have stopped accepting any instrument drawn on State Bank branches of Maharashtra, simply because we cannot get our money cleared.