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Bank employees’ strike: All you need to know

11 July, 2016

Banking operations are likely to be severely hit this week as thousands of public-sector bank officials are set to go on a two-day nationwide strike beginning 12 July. Bank employee unions are protesting against a key decision taken by the government regarding state-run banks.

What has the government decided?

The government has decided to merge the State Bank of India’s (SBI) five associate banks—State Bank of Hyderabad, State Bank of Patiala, State Bank of Bikaner and Jaipur, State Bank of Travancore and State Bank of Mysore—with India’s biggest lender. The cabinet approved SBI’s proposal to bring its associate banks under its fold last month. Also, the government has indicated that it could move on a long-pending proposal to privatise IDBI Bank.

Why does the government want to merge the associate banks with SBI?

India has as many as 24 public-sector banks. SBI’s merger with its five associates is aimed at bringing about a degree of consolidation in the banking sector. The merged bank will have an asset base of almost Rs 37 trillion, more than 22,500 branches and about 58,000 ATMs, according to The Economic Times newspaper. The government feels this could improve efficiency and profitability. The merger will make the resultant entity one of the top 50 banks in the world. SBI had taken over State Bank of Indore in 2010 and State Bank of Saurashtra two years earlier.

SBI Chairperson Arundhati Bhattacharya has said that the merger will be a win-win for the associate banks as well as SBI. Finance minister Arun Jaitley has also said that the merger will make the bank stronger and more viable.

So, why are employee unions opposing the move?

The unions opposing the move say that the merger does not make good business sense as several large accounts handled by associate banks might shift to other smaller public-sector banks, as a bigger entity may not be able to pay so much individual attention to them as a smaller regional bank can. They say the new entity could lose 10-20% of such accounts.

Moreover, the unions fear that the merger could result in closure of several branches, which could lead to job losses, and the present employees of the associate banks would be treated as “second-class” citizens. The unions say that instead of taking strong action against deliberate and willful defaulters, the government is trying to shift attention by going in for consolidation and privatisation.   

Who are the striking employees?

The five SBI associated banks are slated to go on strike on 12 July, followed by other state-run banks on 13 July. They will be joined by All India Bank Officers’ Association, All India Bank Employees’ Association and State Sector Bank Employees’ Association.

How will the strike impact you?

Normal banking operations are likely to get severely affected. Services like cheque clearances, cash deposit and withdrawal at bank branches, and other facilities will be hindered and ATMs could run out of cash.

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Bank employees’ strike: All you need to know

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