People's Democracy

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


No. 35

September 02, 2012


Issues Behind Historic Bank Strike


C P Krishnan


THE two-day total strike by bank employees and officers on August 22 and 23 was primarily against the move of the government of India to dilute the public sector character of the banks. The amendments to the Banking Regulation Act, Banking Acquisition and Undertaking Acts and the Competition Commission Act, proposed by the government, clearly aim at grossly undermining the role of public sector banks (PSBs) and to hand them over as well as indigenous private banks to the multinational corporations on a platter.


RBI governor Dr Subbarao recently made a statement that the PSBs might require around Rs 175000 crore as capital in March 2018. He further said there was no fund in the exchequer to meet such a huge need and so it would be better to privatise the PSBs.  Earlier, Montek Singh Ahuluwalia, deputy chairman of the Planning Commission, had made a similar statement. There is a clear proposal in draft of the 12th Five Year Plan to privatise the PSBs. Raghuram Rajan, who was recently made the Chief Economic Advisor of the prime minister, is a protagonist of privatisation. While heading a committee, he had strongly recommended the sale of PSBs to private corporates --- indigenous or foreign. He further recommended that if that was not immediately possible due to one reason or another, the control of the PSBs must be placed in the hands of private corporates.


One can well understand the ill effects that may follow PSB privatisation. Loans to the peasants, marginalised sections of the people and the small and medium enterprises would be gradually done away with. The primary cause behind the large number of suicides of farmers in the last 15 years is the lack of long term, low interest institutional credit. If PSBs are dismantled, the number of suicides is bound to increase in geometric progression.


Even after 43 years of bank nationalisation, banking services have not reached nearly 50 per cent of the population. The need of the hour is to open more bank branches, particularly in rural areas, to cater to the common manís needs. But the government is treading an exactly opposite path by asking the bank boards to close down the so called unviable rural branches. They also want the PSBs to be merged in the name of consolidation. The result would be the closure of hundreds of bank branches and denial of even the existing services to the banking clientele. 


More than three lakh vacancies remain unfilled in the banking industry; two lakh more will arise in another three to four years due to large scale retirement in this period. Instead of filling up these vacancies through regular recruitment, banks have started engaging business correspondents for meagre wages and entrust to them all sorts of regular bank jobs. These BCs are engaged by a private firm which a contract with the banks. This method is sure to erode the secrecy and security of the customers which they were enjoying hitherto.


The infamous Khandelwal committee recommends rampant outsourcing. This committee does not want the industry-wise wage revision anymore, but bank-wise wage revision, and that too with larger component of wages as variable pay. The ultimate goal is to ensure a union free banking industry.


The strike also pressed for long pending issues like employment on compassionate ground, pension option to those who resigned, pension updation, regulated working hours for officers, five days banking etc.


All state capitals as well as more than 2000 other centres saw huge demonstrations on the strike days. Bank branches wore a deserted look. The clearing transactions were paralysed.


CITU extended solid support to the strike. It as well as the All India Insurance Employees Association, All India Regional Rural Bank Employees Association, All India Reserve Bank Employees Association, All India NABARD Employees Association and All India BSNL Employees Association, among others, staged solidarity demonstrations throughout the nation.


Following the success of the strike, the government has come one step down by announcing that it would withdraw the bill to exempt merger of PSBs from the Competition Commission. But it is still adamant to bring other legislations.


The UFBU leaders will soon decide how to further intensify the struggle.