Business | Banking
Indian bank workers go on strike against merger plans
More than half a million Indian bank employees staged a one-day strike on Friday to protest against proposed mergers between state-run banks, downing shutters on branches and thinning trade in local currency and bond markets.
- Reuters
- Published: 22:51 January 25, 2008
Mumbai: More than half a million Indian bank employees staged a one-day strike on Friday to protest against proposed mergers between state-run banks, downing shutters on branches and thinning trade in local currency and bond markets.
Nine bank unions, representing 900,000 workers, say they are opposing merger proposals and seeking pensions for all bank staff.
About 70 per cent of employees were taking part in the strike, a spokesman for the Indian Banks' Association said.
A Reuters photographer said 5,000-6,000 striking workers, waving banners and shouting slogans, gathered at a park usually used for cricket practice in southern Mumbai, India's financial hub.
In Kolkata, in the communist state of West Bengal, union members waved red flags in front of banks, shutters were down even on automated teller machines and Kolkata residents complained they could not go about their business.
"Union members are not allowing us to enter the bank," said Soumen Naskar, a resident.
India had 82 commercial banks, including 29 foreign banks, and nearly 3,000 urban and rural cooperative banks at March 2007.
Executives at foreign banks said the strike was having only a marginal impact on their operations as only some junior staff at banks such as Citigroup, HSBC and Standard Chartered were affiliated with the unions.
State-run Canara Bank's chairman and managing director, M.B.N. Rao, said 25-30 per cent of his bank's branches were open and 10 per cent of his staff had reported for work.
Absorbing subsidiaries
C.H. Venkatachalam, convenor of the United Forum of Bank Unions and joint secretary of the All India Bank Employees Association, said State Bank of India, the country's biggest bank, was planning to absorb its subsidiaries and there were proposals to merge other state-run banks.
"We are not convinced of the benefits of a merger," he said.
Yesterday's action affected all state-run banks and foreign banks, he said. But newer private banks such as ICICI Bank, Axis Bank, HDFC Bank and Yes Bank were not a part of the strike as they did not have unions.
"Banking operations have been paralysed. Clearing operations, treasury operations, forex operations have been affected," Venkatachalam said, adding the unions would strike again for two days in February and "indefinitely" in March if talks did not progress.
State-run banks are the biggest participants in the currency and bond markets. Two traders at different state-run banks said they would be in the dealing rooms but would not be trading.
"None of the state-run banks will be taking positions in the market due to the strike," said V. Kumar, head of currency trading at State Bank of Travancore. Trade in the benchmark 10-year federal bond was a modest Rs14 billion ($355 million) by 0850 GMT.
"Volumes are very thin and the market is not very liquid," a bond trader at a foreign bank said.
On the stock market, business appeared not to be affected by the strike, with 133 million shares traded.
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