PSU banks begin 2-day strike against reforms

Bank employees in India began a two-day strike on Wednesday to protest against proposed reforms that would ease mergers and allow more private capital, including foreign investment, in the banking sector.

The strike will involve about one million employees and affect 70,000 bank branches of state-run and some private and foreign banks including the country’s biggest lender, State Bank of India.

“The strike will be a total success. We are not against reform, but these are reforms against the public sector banks,” Vishwas Utagi, secretary of All India Bank Employees Association told Reuters. “We will protest on the streets.”

Stock and money market trading volumes might be lower because of the strike although banks would ensure that basic market operations, including treasury volumes and settlements, would continue, bank officials and traders said.

Cheque clearing and the availability of cash at automated teller machines (ATMs) could be most seriously hit.

India, Asia’s third-largest economy, has struggled to reform and liberalise important sectors like banking, retail and insurance, partly because of political opposition and fears of the exploitation of domestic interests by foreign investors.

Parliament is likely to approve a bill to amend some banking laws on Wednesday, which would include raising shareholders’ voting rights limit in private banks to 26 per cent from 10 per cent.

The amendment will meet a major demands of foreign investors seeking more say in the financial system.