BANKING DECLARED AS PUBLIC UTILITY SERVICE FOR SIX MONTHS

The Indian  government has declared banking industry as a public utility service for six months till october 21 under the provisions of the Industrial Disputes Act.Bringing banking services under the provision of this Act means that the banking sector would not see any strikes by employees or officers during the operation of the law which is stating from april 21.

With the latest move, emplooyes and the officers of the highly unionised banking sectir would not be able to go on strike besides certain other activities,according to an industry .In a circular dated April 20,the Department of Financial Services said the labour and employment ministry through a notification has declared"banking industry as a public utility service" for six months effect from april 21.

The notification was issued by the labour  ministry on april 17 against the bankdrop of the coronavirus pandamic  which was has significantly impacted economic activities.The Department of Financial Services circular has been addressed to the RBI Governor,SBI chairman,Manging Directors and CEOS of nationalised banks and the CEO of the Indian Banks Association(IBA).

There are over a dozen emplooyes and officers unions in the banking sector.These unions enjoy a considerable say in wage negotiations, which the IBA deals with every three years.All public sector banks,old generation private sector banks like HDFC Bank,ICICI Bank, Axis Bank and Federal Bank are members of IBA.Some of the oldest foreign banks-HSBC,Stanchart and Citibank are also part of it.All of them come  under otherb employee issue that are taken up by IBA.

New generation private sector lendors like kotak Bank,IntsndusInd Bank are outside the purview of the IBA norms.The circular has been sent to the chairman of all banks as well. With the economy tottering due to the coronavirus lockdown,the last thing the government wants is for the bank employees to go on strike.

There are several issues on which the banks unions don't agree with the decisions of the government.The latest is the merger of several banks.The unions have been  saying that this will lead to the closing down of many branches  due to the consolidation and will lead to loss of jobs due to merjers.

Many had expected that with the lockdown being in the effect, the mergers may be postponed beyond the April 1 deadline.However, the government has gone ahead with the mergers.Even otherwise the process was likely to take a few months for a full implementation at the branch levels and this may get delayed.