In a move that reportedly brought "the country's financial nervous system to a grinding halt," about a million bank employees across India kicked off a two-day strike on Wednesday to demand higher wages and that corporations be held accountable for failing to make loan payments.
"Around 85,000 bank branches spread across the country, including that of State Bank of India and some private banks will remain closed for two days. The response to the strike is good," said C.H. Venkatachalam, general secretary of All India Bank Employees' Association (AIBEA).
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The strike was coordinated by AIBEA and eight other trade groups that belong to the United Forum of Bank Unions (UFBU). Devidas Tuljapurkar, head of UFBU, told AFP that workers are upset with a two percent raise that doesn't account for India's 4.5 percent inflation rate, and that banks are claiming they can't afford to pay employees more because bad loans have left them broke.
"Bankers' justification in offering the meager wage rise is losses to the banks," Tuljapurkar said. "It is big corporates who are attributable for losses to the banks. But for no fault on their part ordinary employees and officers are being denied their due share in profits."
As AFP notes, the country's "troubled lenders have some of the highest levels of debt in emerging markets, weighed down by billions of dollars of non-performing assets (NPAs) also known as bad loans."
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Union leaders reject the banks' excuse, however, emphasizing that low-wage employees shouldn't have to pay the price for companies defaulting on loans.
"At an operating level the banks are still making profits, just that they had to take a hit because of NPAs. But employees can't be blamed for that," Venkatachalam told Quartz India.
The unions haven't publicly announced a counteroffer for the two percent raise but say they want to continue negotiations that started earlier this month with the lenders' lobby, Indian Banks' Association (IBA), the labor ministry, and the finance ministry.
"We have not quoted a percentage as of now because two percent is too small to even argue about it," Venkatachalam explained. "We are ready to negotiate till they can come up with something more reasonable."