Strike notice

IN the past few years public sector banks have seriously got down to the task of evolving a new work culture aimed at providing services to match those of the new-generation private sector banks without losing sight of their social responsibilities and the need to remain profitable. Their efforts have not been in vain considering that so far they have withstood the global economic crisis without harm to customers and investors.

However, the pressure to compete with private banks, particularly foreign banks, is beginning to tell on public sector bank employees, whose numbers came down considerably when a voluntary retirement scheme was offered a few years ago. Today, they put in unlimited hours at work, doing all kinds of tasks, often in difficult conditions.

They complain that the Central government is indifferent to their plight and that amid all this change, only one thing has remained the same: their pay scales. In fact, the wage settlement is pending since November 1, 2007. The non-availability of pension benefits to almost 50 per cent of the workforce and the merger of banks are some of the other issues that are bothering them. The 7.5 lakh employees in public sector banks in the country have decided on direct action to ensure that their demands are met. Their unions have called a nationwide strike on August 6 and 7.

Bank employees are particularly upset that the Indian Banks Association (IBA), the representative body of managements of all public sector banks, reneged on its offer of a 17.5 per cent wage increase. The IBA agreed to the increase on June 9, 2009, but reduced it to 15 per cent on June 17.

The pay scales of bank employees are revised once in five years and a revision was due on November 1, 2007. However, negotiations with the IBA began only in May 2008 and are still incomplete.

What hurts the bank employees is the fact that all other sections, such as Central and State government employees, college/university teachers and employees of public sector units (PSUs), have received generous hikes following the implementation of the Sixth Pay Commission recommendations. Besides, they are irked that even the modest hike the IBA had agreed upon was jettisoned by the Central government in view of the global economic crisis.

With a new set of people taking over after the new government came to power, the equations in the Finance Ministry have changed. Those in charge of banking affairs have to be comfortable with our proposals, which is not the case right now. The IBA cannot act independently. Our proposals have to be vetted and approved by the government in consultation with the RBI [Reserve Bank of India], so we cannot wish the government away, said a senior IBA official from Mumbai who did not want to be named.

According to him, for any new wage settlement to come into being, banking services regulations have to be amended, for which the governments and the RBIs approval is necessary. It is not as if we go to them with a pen and paper for a written permission, but we cannot act independently either, said the IBA official. The IBA chairman, M.V. Nair, who had expressed his helplessness when the bank unions sought an explanation from him, was unavailable for comment.

Talks between the bank unions and the IBA began in May 2008 and on June 9, 2009, after over a dozen meetings, an informal understanding was reached on a 17.5 per cent wage hike, along with benefits such as second option for pension benefit, and so on. Though the offer was less than the unions demand for a 20 per cent hike, they agreed to return to the table after deliberating on the issue. But, subsequently, the IBA informed the unions that the government did not approve of the offer and hence the IBA was reducing it to 15 per cent.

This is something that has never happened in the banking industry in our 40 years of talks with the IBA, said C.H. Venkatachalam, general secretary of All India Bank Employees Association (AIBEA). He is also the convener of the United Forum of Bank Unions (UFBU), the umbrella organisation of all nine officers and employees unions in the banking sector.

Going back on commitments, either by the unions or by the IBA, has never happened before. It was based on this informal understanding that we had withdrawn our strike call for June 12, 2009. This announcement by the IBA came like a bolt from the blue. It left us in an extremely awkward position. We suffered a loss of face and credibility in the eyes of our members. This is unacceptable and we will never allow this, Venkatachalam said.

According to him, the governments inexplicable stand has left the unions with no option but to call for a two-day strike to begin with. If the government fails to see reason, there would be an indefinite strike, he added.

Asked why the government was so insensitive to their just demands when it was generous with other employees, granting them higher salaries as per the Sixth Pay Commission recommendations, he said it may be because we [the bank unions] have been a stumbling block to their neoliberal economic agenda so far.

This call for action, said Venkatachalam, was not confined to wage revision, though that was the most immediate concern. It would now cover all other issues bothering bank employees for some time. The merger of banks topped this list.

The question of merging small banks with larger ones has been in the air for a while, and some time ago New Bank of India was merged with Punjab National Bank. And before that Global Trust Bank was merged with Oriental Bank of Commerce. But these banks, when they were merged, were not profitable.

The government has since given the go-ahead for merging even profitable small banks with big banks, albeit with the unions consent, which, however, remains only on paper. The process has been set rolling with the recent merger of State Bank of Saurashtra with State Bank of India. The next on the block is State Bank of Indore, which is to be merged with SBI. The boards of the two banks have passed a resolution to this effect, which is pending with the government for approval.

The idea is to merge with SBI all its associate banks in order to create a larger entity that can compete with the foreign banks. The banks concerned include State Bank of Travancore, State Bank of Mysore, State Bank of Bikaner & Jaipur, State Bank of Hyderabad and State Bank of Patiala. The bank unions have opposed this aggressively as the future of over 75,000 employees is at stake.

The associate banks were created out of banks owned by the erstwhile princely states by an Act of Parliament, but now these banks are being merged without Parliaments approval. Technological advancement has meant that we already operate on a common platform, so by merging no additional advantage accrues to anyone, said Alok Khare, president of All India Bank Officers Federation (AIBOF) and an employee of State Bank of Indore.

Talking to Frontline from Indore, he said the disadvantages were far too many. Merging a small bank, whose distinct regional identity is its strength, with an ocean like State Bank of India will totally destroy that banks regional advantage. There were issues relating to human resource as well, he said. Mergers lead to loss of seniority, as has been seen with State Bank of Saurashtra (employees lost up to three years of seniority), in addition to retrenchment, voluntary/compulsory retirement and dislocation of staff. The small banks always remain at the receiving end. All this when no perceptible benefits can be seen, Alok Khare said.

Venkatachalam, too, agreed, saying the mergers were in nobodys interest. He said: Even if you merge all the public sector banks into one single entity in India their combined capital would be $3 billion only, while you will be competing against banks like Citibank or HSBC whose capital exceeds $60-70 billion. You cannot match their strength even if you have only one single bank in India. Besides, it involves peoples money. All public sector banks together have over Rs.39 lakh crore of peoples money. Suppose you lose that money in the international market? Who has given you the mandate for risking peoples money?

Issues such as difficulty in cultural integration, drop in the quality of banking services and erosion in social profit also occur, which the government has not taken into account, he said. According to him, while decentralisation and expansion of banking in rural areas were the need of the hour, the government was hell-bent on destroying small banks, which would ultimately lead to a monopolistic situation that would benefit only the rich.

In India, banking has not yet reached its saturation, so we should focus more on expanding our services. But bank managements and the government seem bent upon shrinking it, he said.

The other big issues agitating bank employees are the non-availability of pension benefits to over 50 per cent of the workforce and the complete stoppage of recruitment on compassionate grounds.

Extension of the pension scheme to all the 7.5 lakh bank employees is a long-pending demand. The unions even agreed that a portion of the burden would be shared by the employees, but the government was yet to take a decision on this.

Since 2004, recruitment on compassionate grounds, of a member of the family of an employee who dies, has been stopped and no financial compensation is available to the family. They want a resumption of this. The government has taken recourse to wrongly interpreting a Supreme Court judgment in this regard, denying any help to the families of those who die while in service. This is inhuman to say the least, but our demands have fallen on deaf years so far, said Alok Khare.

The denial of their just demands, coupled with the increasing work pressure, inadequate compensation and the lack of any security post-retirement/death, has demotivated and frustrated the bank staff to such an extent that it is sometimes difficult to make them work, said N.S. Virk, vice-president of the All India Bank Officers Association (AIBOA).

He said the salaries of bank officers were on a par with Group I officers of the Central government until the implementation of the Sixth Pay Commissions recommendations, when they fell by at least 40-50 per cent in comparison with Group I officers. Now, their salaries did not match even those of Group III employees, he claimed. Even if the bank staff get the 17.5 per cent hike, the officers salaries will still be much lower than those of Group I officers, said Virk.

Now the UFBU has decided to pursue the path of agitation until our demands are met. For the common people this would mean endless disruptions in banking services and avoidable harassment.