Home Economy Bank strike affects individuals and corporates alike

Bank strike affects individuals and corporates alike


New Delhi : A strike by over a million employees of 25 state-run banks was affecting both individual and corporate customers Friday, the second day of the two-day strike over wages and pensions.

While bank managements tried to keep automated teller machines (ATMs) across the country supplied with cash, cheques were not being cleared, delaying payments all around.

“Eighty five percent of the bank branches have reported closed. It’s difficult to quantify how much business has been affected, but there will be hardship for the people,” K. Unnikrishnan, senior vice president and deputy chief executive of the Indian Bank Association (IBA), a body representing bank managements, told IANS.

“Cheques will be cleared on Saturday but the remittances will happen only by Tuesday. However, online remittances are on, which will help reduce the impact of the disruption,” added Unnikrishnan.

The trading volume at Indian equities and bond markets is also expected to be slim Friday as a lot of payments are routed through state-run banks.

“In bond markets, banks are big players and hence volumes will be down. As settlements and clearance process are hampered, equity trading may also get affected,” said Jagannadham Thunuguntla, equity head at SMC Capitals.

It is estimated that an average 3.52 millon cheques (valued around Rs.26,767 crore) were cleared everyday during May 2009.

Private sector banks are open, but operations which involve transactions with public sector banks are expected to be affected.