Cheque clearances and attendance in banks may be affected, but money market functioning to be normal; 10 lakh employees on day-long strike
The banking strike called by the United Forum of Bank Unions which has seven unions under its fold may not have any impact on the functioning of the money markets. However cheque clearances and attendance in the banks may be impacted.
Venkat Nageswar SBI deputy managing director at SBI in charge of global markets said " the strike will not impact the money market operations."
AT A GLANCE
Why are 10 lakh bank employees going on strike?
- Against anti-labour, anti-people reforms
- Demands for stringent steps against wilful corporate defaulters
- Wage revision
- Accountability of senior executives
- Hike in bank recapitalisation amount
- Faster implementation of bankruptcy code
- Compensation for overtime during demonetization
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About 10 lakh bank employees and officers from public, private and foreign banks are observing a one day strike against the alleged anti-labour reforms and anti-people reforms in the banking industry. Besides they are also demanding stringent steps against wilful corporate defaulters who the unions allege are looking crores of rupees of hard earning savings of the common man. Bank employees are from Mumbai are striking work to hold demonstrations at Azad Maidan.
Head of treasury of a private bank said, "Bankers expect the dealer which are the officer category of the employees to come to work unless they are physically stopped by the unions from entering the dealing room."
Unions demands also include wage revision and accountability of senior executives in view of mounting bad loans in the banking sector. The strike was initially called on February 7 by three bank unions, but it was postponed to February 28 because individual unions of several state-owned banks were also keen on participating.
The unions are also demanding an increase in the amount of bank recapitalisation and speedier implementation of bankruptcy code to enable faster resolution of stressed assets. For the financial year 2017-18, the government has earmarked Rs 10000 crore towards recapitalising public sector banks. Bank employee unions are also demanding compensation for bank employees who worked extra hours on account of demonetization.
"Volumes may be slightly lower in the call money and currency market, participation will remain low as all PSU banks are on strike and branches will be closed on Tuesday," said a dealer at a state-owned bank said. "But, gilts (government bonds) volume is unlikely to be impacted much. Staffing in dealing rooms will remain normal."
Owing to the strike, the call market also saw significant activity in the two-day segment on Monday. The total traded amount in the two-day segment was Rs 750 crore compared with Rs 1,291 crore in the overnight segment, which is typically the most active.
On Monday Government bonds (G-Secs) gained further following persistent demand from corporates and banks, while the overnight call money remained lower due to lack of demand from banks due to the comfortable liquidity situation in the banking system. The 7.59 % government security maturing in 2026 rose to Rs 103.60 from Rs 103.39 previously, while its yield fell to 7.04 % from 7.07 %. The 6.97 % government security maturing in 2026 climbed to Rs 100.62 from Rs 100.3825,while its yield declined to 6.88 %. The overnight call money rates finished lower to 5.75 % from Thursday's level 6.15 %. Its resumed lower at 6.05 % and moving in a range of 6.25 % and 6.75 %.
With inputs Cogencis
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