Mumbai // About a million bank workers in India began a two-day strike yesterday to challenge government reforms that aim to open up the sector to greater influence from private and foreign investors.
It was mainly public-sector banks, including the State Bank of India and Bank of India, that closed their doors yesterday, delaying transactions across the country. The State Bank of India reportedly even had to stop trading in onshore spot foreign exchange markets because of a lack of staff.
"We're appealing to all the members of the parliament that they should oppose this bill," said Vishwas Utagi, the secretary of the All India Bank Employees Association. "We are opposing here by going on strike."
The reforms, if approved, would see limits on shareholders' voting rights increase to 26 per cent from 10 per cent in private-sector banks and to 10 per cent from 1 per cent in public-sector banks.
The strike comes as India is grappling with slowing economic growth, a weak rupee and soaring inflation.
Unions fear the amendments could bring more corporate and foreign investors into the banking sector, which they believe would not be of benefit to the majority of the population, particularly in India's rural societies.
"We are opposing the FDI [foreign direct investment] in the Indian banks," Mr Utagi said. "India is a poor country. There's a concentration of capital in a few rich people in a few cities. Now these rich people, like the corporates and the multinational banks, want to control the banking system and this is disastrous for the Indian masses. Today, the multinational banks do not serve the Indian masses. Multinational banks serve only the Indian corporates," he said.
"The global financial crisis has taken place because of the ways the banks are run in England, Europe, and America. They have done speculative banking. Here in India we do the bricks-and-mortar banking."
There is also widespread concern among the bank unions that the reforms could lead to job losses.
But analysts have argued liberalisation of sectors such as banking will help to boost the industry.
"The changes in the banking laws can improve the health of the banks quite considerably," DH Pai Panandiker, the head of the RPG Foundation based in New Delhi told Reuters.
RN Patel, the general secretary of the Bank of Maharashtra officers' association, expressed concern about greater corporate and foreign control of the country's banks.
"The public-sector banks have the funds and money of the common man," he said. "In case the public-sector element of these banks is diluted, these funds will go to some selected capitalists. This was exactly why these banks were nationalised way back in 1969 and since then the banking industry has helped the common man of this country, plus a lot of progress has been done in the economy because of this public-sector character of the banks, so we don't want that to stop."
Mr Patel was among a number of bankers who gathered for a protest meeting yesterday in Mumbai at Azad Maidan, a sports ground that is a popular venue for cricket matches and political rallies.
One supervisor who works for the Central Bank of India and attended the meeting said he was firmly opposed to the bill.
"This will have a damaging impact on the government, on the public as a whole, the India economy as a whole and people who are working in banks," he said, asking not to be identified.
The strike had been announced about a month ago, so customers in India were prepared for the disruption, he said.
A clerk who did not wish to be named at Kotak, a commercial Indian bank and one of the few banks open in south Mumbai yesterday, said transactions had been limited because many institutions were dependent on the state-run banks being operational.
Mr Utagi said he was already happy with the way the strike was going."It's a 101 per cent success," he said.
"The Indian banking system has come to a grinding halt."
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