Bank staff at breaking point

Employees in nationalised banks were often mocked for their slow pace of work and long lunch breaks. Until the midnight of November 8 when demonetisation took effect.

At the currency exchange counter of a bank in Guwahati, an employee makes sure the 500-rupee note is a genuine one, on November 11.

“The average bank official had not witnessed this kind of pressure in an entire lifetime!” quipped the veteran journalist Padmanabha Devarajan, who has tracked the business sector for close to four decades. Employees in nationalised banks were often mocked for their slow pace of work and long lunch breaks. Until the midnight of November 8 when demonetisation took effect.

With no warning or time to plan for the transition, banking officials, clerks and other staff were plunged into the chaos that built up over the following days. There are only a few cash handlers in a bank, but the crisis forced even officers to sit behind cash counters. When digitisation was introduced in banks in urban areas, branches became smaller and staff was downsized. The majority of the Reserve Bank of India’s work shifted to commercial and private banks. The RBI had 22,000 employees in Delhi alone a few years ago, but today its total employee strength across the country is around 15,000, said M.L. Malkotia, vice president of the Centre of Indian Trade Unions.

Post-demonetisation, the leave of all bank employees was cancelled and overtime became the norm. With the government changing its instructions to banks at will, the staff had to continuously change gear to keep pace. Irate customers kept pushing them to the brink. The long queues outside banks maintaining a constant pressure did not help matters.

Reports from some banks of angry customers berating and getting violent with bank staff poured in. A branch of IDBI bank in Sabzi Mandi, Delhi, was vandalised by people who threw huge rocks. The bank employees had to hide in a toilet and the vault to protect themselves. “It is not the fault of the bank staff if enough money is not available through the day. The rush is so much that the currency is being picked up by people in a few hours and the bank is helpless,” explained C.H. Venkatachalam, general secretary, All India Bank Employees Association. For a week, bank officials fully supported the decision of the government, and worked overtime and through their holidays. They put on hold a strike that had been planned to demand a revision of pension. In some places, bank officials even made a quick buck by doing precisely what they were supposed to curb: they took a cut to facilitate illegal transactions.

But a week into the exercise, they seemed to be reaching breaking point. Collecting IDs, applying indelible ink and keeping a tab on black money are, after all, not in the job description of bank officials. “It is not my job to track black money. It is Modi’s job, let him do it,” said Venkatachalam. He added that if the situation remained the same for the 50 days’ time that Modi had asked for, the majority of the bank staff would review and even consider withdrawing their support for the entire exercise. “The government did not anticipate the problems of demonetisation and the bank employees are bearing the brunt of its fallout. If the government wants, it can allow all government institutions to exchange the notes, and that would clean up the system in 15 days. But what is happening is very unplanned. The indelible ink was introduced after a week, by which time the money launderers had already done their job. Now it is only the genuine people who are suffering,” said Venkatachalam. Whatever surplus would remain with the banks after the squaring off of accounts would need to be pumped back into the economy probably as retail loans. Otherwise banks would be required to pay interest on the amount they hold. By that token, thousands of crores of rupees would have to be paid by the banks as interest towards the money lying in their accounts, said Venkatachalam. “Let the government collect the money and give interest to the bank, why should banks be penalised? As it is, the cost of logistics towards this exercise has been humungous. Why are they crucifying us? he said.

Meanwhile, the banking sector is gearing up for a second stress cycle post December 30 when exchange of currency will stop and Rs.2,000 notes are likely to get inducted into the corruption cycle. “Why does HDFC give housing loans of up to 80 per cent only? If they give 100 per cent loans, then the window of black money in such transactions to real estate builders effectively closes. But they don’t do that,” said Devarajan, indicating that this demonetisation exercise was just a gimmick.