Nearly 1 million bank employees in India are set to go on strike this week

• Bank employees are protesting a proposal by the Indian Banks Association to hike their wages by only 2%.
  
• Their last wage revision in 2015 comprised a 15% hike.
  
• However, India’s banks are in a worse state than before, given the continued buildup in non-performing loans.
  
  

If you’re in India, planning to use an ATM or withdraw a portion of your monthly salary this week, you might have to hold off for a few days.

A large number of bank employees, all of whom are members of bank unions, are set to stage a strike tomorrow and day after, across the country, in response to insufficient hike in their wages. D T Franco, the general secretary of the All India Bank Officers’ Confederation, told media outlets that the number of participants in the strike would total around 1 million.

The strike comes despite efforts by the central government to avert it. The Chief Labour Commissioner, Rajan Verma, was unable to convince the representatives of all nine of India’s bank unions - which come together under the umbrella of the United Forum of Bank Unions (UFBU) - to accept the 2% increase in their wages that was proposed by the Indian Banks Association (IBA).

According to a notice issued by the UFBU, the workload of these employees has surged in recent years, given the expansion of branch networks, launch of government banking schemes and increased compliance protocols. Concurrently, their costs of living have also increased.

The UFBU’s demands include a swift and adequate increase in wages as well as the inclusion of lower-level managers, who were excluded from the wage hike scheme. The IBA only awarded pay hikes to senior managers, above the Scale III level.

No easy solution

The last time bank employees received a wage hike was in February 2015, when wages for the period starting November 2012 were retroactively increased by 15%. Employees were likely expecting a proportional hike this time.

A wage hike has been due since November 2017, when the last hike agreement expired. In the ensuing months, the 2% hike proposal has been discussed and rejected, with employees threatening a strike if the proposal wasn’t revised.

Given the build-up in non-performing assets, slowdown in lending and widening losses, India’s banks aren’t in the best of health at the moment. Hence, a larger wage hike will only hurt their finances more.

However, as the UFBU argued, employees can’t be forced to bear the burden of India’s bad loan problem.

The IBA has no choice but to negotiate an increase in wages - one that is not only acceptable to all striking employees, but that is also feasible for all banks. It will be a tricky balancing act.