The 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 provisions of this Act means that the banking sector would not see any strikes by employees or officers during the operation of the law starting from April 21.
With the latest move, employees and officers of the highly unionised banking sector would not be able to go on strike besides certain other activities, according to an industry expert.
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 with effect from April 21.
The notification was issued by the labour ministry on April 17 against the backdrop of the coronavirus pandemic which has significantly impacted economic activities.
The Department of Financial Services’ circular has been addressed to the RBI Governor, SBI Chairman, Managing Directors and CEOs of nationalised banks, and the CEO of Indian Banks’ Association (IBA).
There are over a dozen employees 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 wage settlements and other employee issues that are taken up by IBA.
New generation private sector lenders like Kotak Bank, IndusInd Bank and Yes Bank are outside the purview of IBA norms.