Three-day bank strike deferred; branches to operate normally from Monday.
India’s planned three-day nationwide bank strike, scheduled from September 28 to 30, has been deferred following an agreement between the United Forum of Bank Unions (UFBU) and the Indian Banks’ Association (IBA) late on Sunday.
The breakthrough came after representatives of the two sides met at 9.30pm local time on Sunday, just hours before the industrial action was set to begin.
With the strike postponed, bank branches are expected to operate normally from Monday, averting significant disruption at a crucial time for banks as they approach the half-yearly closing of accounts.
Key highlights
- The nationwide bank strike planned for September 28-30 has been deferred.
- Bank branches are expected to function normally from Monday.
- The UFBU and IBA have agreed to immediately set up a joint high-level committee.
- The committee will examine the unions’ demand to declare all Saturdays as bank holidays.
- Currently, banks are closed on the second and fourth Saturdays of each month.
- The agreement does not mean that a five-day banking week has been approved.
- No deadline has been announced for the committee to complete its deliberations.
- Discussions will also begin on proposed changes to the performance-linked incentive (PLI) scheme for officers in Scale IV and above.
- Other unresolved matters stemming from the March 8, 2024 discussions will also be addressed.
- The UFBU has deferred its other planned agitation programmes, including its proposed indefinite strike.
What was agreed on five-day banking?
At the heart of the dispute is the unions’ long-standing demand for a five-day banking week, which would make every Saturday a holiday for bank employees.
Under the latest agreement, the UFBU and IBA will establish a joint high-level committee to examine the proposal for declaring the remaining Saturdays as holidays. The panel will assess various options and consult stakeholders, including bank customers, as it works towards a possible solution.
However, the agreement does not approve holidays on all Saturdays, meaning a five-day banking week has not yet been introduced.
There is also no specified deadline for the committee to conclude its discussions or make a decision.
Under the existing system, banks remain closed on the second and fourth Saturdays of every month.
Why were bank unions planning a strike?
The UFBU had called the three-day nationwide strike from September 28 to 30 primarily to press for the implementation of a five-day banking week.
The unions have been seeking the declaration of all Saturdays as bank holidays, a demand that remains unresolved despite previous discussions with the IBA. The latest agreement has put the planned industrial action on hold while both sides pursue the issue through the newly proposed joint committee.
Bank unions have argued that employees already work extended hours and noted that discussions over introducing a five-day banking week have been ongoing for more than two years.
They have also cited an agreement in principle reached in March 2024, under which banks would remain closed on all Saturdays while employees would work additional hours from Monday to Friday.
According to the unions, the proposal was subsequently forwarded to the government for approval but has remained pending.
Government sources, however, have maintained that a five-day banking week was neither formally agreed upon nor included as part of the earlier wage settlement.
PLI scheme is another point of dispute
Another key issue involves the performance-linked incentive (PLI) structure for senior bank officers.
Under the current arrangement, officers in Scale IV and above are eligible for performance-linked incentives of up to 365 days of basic pay. In comparison, other employees and officers up to Scale III can receive a maximum incentive equivalent to 15 days of basic pay plus dearness allowance.
Bank unions have raised concerns over this disparity, arguing that it differs from their earlier understanding that performance incentives would be linked to the overall performance of the bank rather than structured differently across employee categories.
Under Sunday’s agreement, the IBA will hold further discussions on possible revisions to the PLI framework and subsequently take the matter forward with the government.
What does this mean for bank customers?
For customers, the most immediate consequence is that the proposed three-day nationwide bank shutdown has been deferred, meaning branch services are expected to continue as normal.
Customers can expect:
- Bank branches to open on Monday, September 28
- No nationwide branch shutdown between September 28 and 30 as previously planned
- Regular branch services to continue, subject to individual bank operating hours
- The proposal for a five-day banking week to remain under discussion
- Any future changes to depend on further talks involving the IBA, UFBU and the government
Why were banks open on Sunday?
Ahead of the proposed strike, public sector banks and Regional Rural Banks had been asked to remain open on Sunday, September 27.
The additional working day was intended to give customers an opportunity to complete essential branch transactions before the planned three-day shutdown. The measure was particularly significant as the strike would have coincided with the half-yearly closing of bank accounts.
With the strike now deferred, the Sunday opening helped reduce the risk of disruption, while regular banking operations are expected to continue from Monday.
What happens next?
Following Sunday’s agreement, the UFBU has deferred both the three-day strike and its other planned agitation.
The next step will be the formation of a joint IBA-UFBU high-level committee to examine the demand for all Saturdays to be declared bank holidays.
The unions had previously proposed an indefinite strike from October 26 if their demands remained unresolved. That action has also been deferred following the latest agreement, and no new strike date has been announced.
