Bank Unions Defer Three-Day Strike After Late-Night Talks With IBA

Bank branches across India are functioning normally this week after employee and officer unions deferred a three-day nationwide strike that was due to begin on Monday, 28 September. The decision followed a late-night meeting on Sunday between the United Forum of Bank Unions (UFBU) and the Indian Banks’ Association (IBA), the industry body that represents bank managements in wage and service negotiations.

According to ANI and Business Standard, the two sides met at 9:30 pm on 27 September and reached an understanding that led the unions to put off the strike planned for 28 to 30 September. In a circular, the UFBU said the proposed agitation programmes and strike actions “will be deferred.” Banks are expected to keep regular hours through the end of the month.

What the two sides agreed

The understanding covers three main issues. First, the IBA and the UFBU will set up a high-level committee to examine the unions’ core demand of declaring all remaining Saturdays as holidays. The committee is expected to look at possible alternatives, consult stakeholders and work towards a solution acceptable to all parties.

Second, the two sides will hold discussions on changes to the Performance Linked Incentive (PLI) scheme for officers in Scale IV and above, with the IBA expected to take proposals to the government. Organiser reported that officers at these senior scales can currently earn an incentive of up to 365 days of basic pay, compared with 15 days for employees in lower scales, a gap that has been a sore point for the unions.

Third, the IBA agreed to work towards early resolution of outstanding issues recorded in the minutes of a meeting held on 8 March 2024. The UFBU is an umbrella body whose constituents include the All India Bank Employees’ Association (AIBEA), the All India Bank Officers’ Confederation (AIBOC), the National Confederation of Bank Employees (NCBE), the All India Bank Officers’ Association (AIBOA), the Bank Employees Federation of India (BEFI), the Indian National Bank Officers’ Congress (INBOC) and the Indian National Bank Employees’ Federation (INBEF).

The long wait for a five-day week

The demand for a five-day banking week is not new. Under the proposal, banks would close on all Saturdays, and working hours from Monday to Friday would be extended by about 40 minutes a day to make up for the lost time. The arrangement was agreed during wage negotiations in March 2024 but still requires government approval. At present, banks remain shut on the second and fourth Saturdays of each month and work on the others.

Frustration over the delay had already led to a one-day strike on 11 September. The three-day action announced for the end of the month was a sharper escalation, and it drew attention because of its timing. The Finance Ministry had warned that disruption around 30 September, the close of the half-year for banks and companies, could affect customers, businesses, government transactions and international banking operations. In anticipation, the Reserve Bank of India had approved the opening of bank branches, offices and currency chests on Sunday, 27 September, to limit the impact.

Why it matters for business

Averting the strike removes a real operational risk at a sensitive moment. The last days of September are among the busiest for the banking system: companies settle advance tax and quarter-end payments, government departments close their half-yearly accounts, and banks finalise balance sheets that feed into their September-quarter results. A three-day shutdown of branches at public sector and many old private sector banks would have hit cheque clearing, cash handling, trade finance paperwork and treasury operations.

Digital payments such as UPI and most net banking services generally continue during strikes, but services that depend on branch staff, including large cash deposits, demand drafts and some loan processing, typically suffer. For small businesses that still rely heavily on branch banking, a three-day closure followed by the usual month-end rush would have been costly.

The episode also highlights a broader question for bank managements and the government. Public sector banks have improved profitability sharply in recent years, and employee unions have pressed for a share of the gains in the form of better working conditions. How the five-day week is handled will set the tone for industrial relations in the sector, which employs lakhs of people.

What happens next

The immediate focus will be on how quickly the promised committee is constituted and who sits on it. The final decision on a five-day week rests with the government, and the IBA’s proposal on revising the officers’ incentive scheme will also need the Centre’s approval.

The strike has been deferred rather than withdrawn. ANI reported that it has been put off indefinitely, while other reports simply described it as deferred. Either way, the unions retain the option of reviving their agitation if the talks stall. For now, customers can expect branches to remain open through the half-year close on 30 September.