Bank employees on two-day strike from Wednesday.

Mumbai: Banking services such as cheque clearing may get disrupted for two days beginning Wednesday with the United Forum of Bank Unions (UFBU), an umbrella body of nine employee unions, threatening a strike.

Employees of 27 public sector banks, 12 private lenders and eight foreign banks will stay off work to protest the government’s decision to pass an amendment to the banking laws bill, expected to come up for discussion in Parliament on Wednesday, according to C.H. Venkatachalam, convenor of UFBU.


The unions claim the proposed legislation will promote privatization of Indian state-run banks and give more powers to foreign investors and Indian corporations in the running of private banks.

They are also against the Khandelwal committee’s recommendations for introducing variable pay in public sector banks and 50% direct recruitment of bank officers from the market.

The Indian Banks Association, an industry lobby of lenders, said banks will save up to Rs. 400 crore in terms of wages to the striking employees.

The unions decided to strike work after a meeting with the chief labour commissioner in Delhi on Tuesday ended inconclusive.

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Rate cut unlikely as RBI sees more risks on inflation front

 The Reserve Bank on Monday hinted at holding on to its elevated rates in the quarterly monetary policy review tomorrow, saying there are increased risks on inflation scenario and lack of action on the fiscal front.

“Monetary policy space needs to be created through fiscal adjustment and structural measures to improve supply conditions ...” the Reserve Bank said in its report on Macroeconomic and Monetary Developments, released on the eve of the policy announcement.

The near-term outlook on inflation is marked by a slew of upside risks despite significant slowdown in growth, the RBI said, adding that suppressed inflation, poor supply responses and a weaker monsoon are risks to price-situation.


“Persistence of inflation, even as growth is slowing has emerged as a major challenge for monetary policy,” it said.

For the month of June, the headline or WPI inflation stood at 7.25 per cent while the consumer price index was at double-digit level of 10.02 per cent.

The pro-growth lobby, which is alarmed over quarterly growth slipping to a nine year low of 5.3 per cent for the March quarter, wants the RBI to slash interest rate to prop up growth.

In its last review of June 16, the RBI had refrained to cut policy rate despite hard lobbying by industry to ease policy rate.

RBI also said that the growth in the current fiscal is likely to be below the reduced potential of 7.5 per cent because of “global headwinds, inflation and policy uncertainty”.

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