People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 37

September 21 , 2008


                    Why Bank Employees Are Striking Work On Sept 24 & 25

C P Krishnan

AROUND nine lakh bank employees and officers throughout the country have decided to strike work for two days on September 24 and 25, 2008 in protest against the financial sector reforms set rolling by the UPA government and in support of the demand for expeditious implementation of the MoU (Memorandum of Understanding) signed between unions and IBA (Indian Banks Association) on February 25, 2008 relating to extension of pension option, compassionate ground employment, recruitment and early conclusion of wage revision.

The decision to go for strike was taken by the United Forum of Bank Unions (UFBU) consisting of nine organisations of employees and officers on August 21, 2008 at Chennai. In the meanwhile a communication released by the central government has termed the strike as “illegal” and warned the unions to desist from resorting to strike.

The Congress-led UPA government is treading the path of the previous BJP-led NDA government and is actively attempting to bring many reforms in the finance sector which would virtually mean handing over the entire banking industry to a few business tycoons on a platter.

As early as May 13, 2005, a bill was introduced by this government in the Lok Sabha amending some of the provisions of the Banking Regulation Act, 1949. This amendment bill included deletion of Sec. 12(2) of the Act restricting the voting rights of the shareholders to 10 per cent in private banks irrespective of the size of their shareholding. It is only this clause that has been preventing the private sector banks from going into the hands of the large industrial houses. Simultaneously attempts were made to raise the foreign direct investment (FDI) limit to 74 per cent in the banking industry. If the move of the government was allowed to be implemented, the Indian private banks would have fallen into the hands of the multinational companies long ago. Of course, dependent as it was on the support of the Left parties for its survival, the UPA government could not dare to take any such measures so far despite being ambitious.


Now, after ‘winning’ the vote of confidence without the support of the Left parties, the UPA government has taken a series of steps towards the direction of converting whole of the banking industry to class banking.

One such step is merger of SBS (State Bank of Saurashtra) with SBI (State Bank of India) through a notification of the government and the Reserve Bank of India as decided by the cabinet. All along whenever the unions went on agitation including strikes against the proposed mergers of the banks, the GOVERNMENT was maintaining that there was no such proposal from their side. If two banks wanted to merge amongst themselves voluntarily, the government would only bless them. But now this has been proved to be a white lie. The mergers of the banks would follow large scale closure of branches, denial of banking services to lakhs of common people and render manpower as a huge surplus that would be eased out in course of time. Besides, it has always been proved that the bigger banks are helpful only for large advances. Tata group was sanctioned a loan of Rs 5000 crore by SBI for acquiring Kores group of companies in five minutes time at a cheap rate of interest. The needs of the marginalised sections of the people would be grossly neglected.

Recently three committees, two appointed by planning commission and the other by IBA have come out with their recommendations. One committee headed by Anwarul Hoda, a member of the planning commission has submitted its report in March 2008; the other committee headed by Raghuram Rajan, a professor of Chicago University has come out with its report in April 2008; the third formed by IBA chaired by M R Umarji, IBA's chief advisor (legal) placed its report in May 2008.


All the recommendations of these three committees clearly aim at changing the very basic structure of the banking industry in favour of the liberalisation, privatisation and globalisation policies. Some of the recommendations of these committees are:

Thus it can be safely concluded that even if some of the above recommendations are put into practice, the whole direction of the Indian Banking Industry will be shifted in favour of big capitalists and MNCs and against the interest of the common people.

Already in the past ten years nearly two lakh farmers have committed suicide in the country. The important element of their sufferings and inducement to this extreme step is the lack of long term credit from banks at concessional rate of interest. If these policies are allowed to rule, then the Rs 35 lakh crores of deposits of the banking industry -- seven times the national budget -- shall be at the disposal of the large industrial houses thus increasing the miseries of the common people many times.

Most of the steps like upgradation of technology, reducing the manpower drastically, stoppage of recruitment of workmen for more than two decades, resorting to rampant outsourcing of jobs are already underway. The other idea behind this move is to establish trade union free banking industry.

It is primarily against these policies of the central government that the bank employees throughout the length and breadth of the country, irrespective of the political ideologies of the trade unions, have joined together and given the call for two days’ strike. The strike, no doubt, shall inconvenience the public at large temporarily. But the harmful policies of the government can be halted only through this action and a greater relief to the common man can be ensured only through this militant action of the workers braving threats and wage cut.

(The writer is central committee member of  Bank Employees Federation of India)