Bank employees go on nation-wide strike to protest against Banking Laws (Amendment) Bill
Bank employees are observing a day-long nation-wide strike in protest against the Banking Laws (Amendment) Bill.
Four bank unions -- All India Bank Employees Association (AIBEA), Bank Employees Federation of India (BEFI), All India Bank Officers' Association (AIBOA) and National Union of Bank Employees (NUBE) - led the strike on Thursday.
The Bill, which was passed by the Lok Sabha, recently, clears the path for more foreign investment in the banking sector by approving increased shareholders' voting rights, after dropping a controversial clause allowing banks to trade in commodity futures.
Prime Minister Manmohan Singh's government is racing against the clock to pass reforms economists say are needed to breathe life into Asia's third-largest economy, which is headed for the worst year of growth in a decade.
The Banking Laws (Amendment) Bill is the only piece of major reform legislation to be passed in a parliament session again disrupted by protests and shouting matches.
In Kolkata, banks remained closed as employees said they would continue with their protest.
"The main reason is the bank regulation bill, which has been passed in the parliament. We are against the bill because we think the lives of bank employees are at stake and the bill heading towards the privatisation of banks and also the merger of banks, that's the main reason and we are opposing it wholeheartedly," said U. K. Gangopadhyay.
A similar sight was also seen in Mumbai.
"We do not have any economic demand in this strike. Our strike is in the interest of the people. Our strike is in the interest of strengthening the public sector banks. We shall keep on opposing the government's measure, even after the bill is passed because we do not want it to be implemented. We are also opposed to the opening of the new private sector banks; new licenses are being given to corporates. We are opposed to that," said Abhay Kumar, another banker.
India has struggled for years to reform and liberalise state-dominated sectors such as banking, insurance and pensions due to political opposition, including from within the ruling Congress party.
The Banking Laws (Amendment) Bill will give the country's central bank, Reserve Bank of India (RBI) greater regulatory oversight over local banks and the ability to overrule boards when the banks are facing financial difficulties. The RBI had demanded more oversight as a precondition to issuing new banking licences.
The bill also enables the government to raise voting rights in state banks such as the State Bank of India to 10 percent from just 1 percent now, acceding partially to foreign investors' demands to have more say in Indian banking.
The bill will allow foreign banks to convert their Indian operations into local subsidiaries or transfer shareholding to a holding company of the bank without paying stamp duty.
Foreign banks have long sought these changes to the law, which they say would encourage them to expand their operations in India.
Under current laws, foreign banks such as Citibank and Standard Chartered have to pay 20-30 percent tax as capital gains and stamp duty when transferring branches to a new legal entity.