HUNDREDS of thousands of bank employees, working largely for India's dominant state-owned lenders, have called off a planned four-day strike after agreeing a 15 per cent wage increase, a senior union official said on Monday (February 23).
The United Forum of Bank Unions, which says it represents nearly a million bank workers, had called for a strike starting on Wednesday (February 25), with demands including higher wages and a five-day work week. Banks in India operate on Saturdays.
A strike would have paralysed some of the country's largest banks, crippling cash transactions and cheque clearances in an economy where card payments are still unusual. It would have dampened money market and foreign exchange trading volumes, potentially increasing volatility.
The protracted negotiation with unions is also a reminder of the complex task ahead as the government tries to reform India's network of state-owned banks, which account for more than 70 per cent of loans.
Unions reached the wage settlement after 18 rounds of negotiations over more than two years, Vishwas Utagi, a senior union official, said. The new salaries, applicable for more than 700,000 bank workers, will be backdated to November 2012 and valid for five years, he said.
Utagi said the estimated cost for banks as a result of the salary increase will be an annual Rs47.25bn ($758.7m/£493.64m).
As part of the negotiation, the banks and unions also agreed that only two Saturdays a month will be working days.
The Indian Banks' Association, confirmed the wage revision and the holiday agreement in a statement.
