Banking operations, especially across public sector banks, were disrupted nationwide on Friday as employees and officers participated in a one-day strike called by the United Forum of Bank Unions (UFBU).
The September 11 strike is part of an escalating dispute between bank unions and authorities over several long-pending demands. The key issues include implementation of a five-day banking week, differences over the performance-linked incentive (PLI) system, pension-related matters and other unresolved service concerns.
The disruption was reported across multiple states. In Madhya Pradesh, nearly 7,000 bank branches were affected, with around 42,000 employees taking part in the strike. The day's disruption was estimated to impact banking transactions worth approximately Rs 5,500 crore in the state.
The strike has primarily affected public sector bank branches, while most private sector banks have continued their normal operations. However, customers could face delays in services that depend on branch staff.
The unions have already announced further industrial action if their demands are not resolved. A three-day nationwide strike is scheduled for September 28, 29 and 30. The UFBU has also warned of an indefinite nationwide strike beginning October 26 if there is still no satisfactory resolution.
The most prominent demand behind the current agitation is the introduction of a five-day banking week. The UFBU maintains that the Indian Banks' Association (IBA) had already agreed to the proposal under the 12th Bipartite Settlement and 9th Joint Note signed on March 8, 2024.
Under the proposal, working hours from Monday to Friday would increase by around 40 minutes, allowing Saturdays to be declared holidays. The proposal was later recommended to the government, but according to the unions, implementation has remained pending for more than two years.
Bank unions argue that they are seeking implementation of an agreement already reached between employee representatives and the banking industry rather than asking for a new concession. They have also linked the five-day week to better work-life balance, improved working conditions and the growing use of digital banking services.
Another major point of contention is the performance-linked incentive scheme. The UFBU has objected to the revised structure, particularly because of the potential difference in incentives between senior officers and other employees.
Under the earlier understanding with the IBA, PLI was linked to the overall performance of a bank, with a common number of incentive days for employees and officers up to Scale VII. The government later introduced a different arrangement for senior officers.
Under the disputed structure, officers in Scale IV and above could receive incentives linked to individual performance, while employees and officers up to Scale III faced a substantially lower ceiling. Unions argued that the arrangement could result in a significant disparity in incentive payments.
There was some movement on the PLI issue ahead of Friday's strike. The Department of Financial Services advised public sector banks to keep the PLI scheme applicable to Scale IV to VIII officers in abeyance for 2025-26. The matter is expected to be discussed bilaterally between the unions and the IBA.
The UFBU welcomed the development but maintained that it was insufficient to withdraw the strike because the central demand for a five-day banking week remained unresolved.
During a conciliation meeting on September 9, the government said the proposal for five-day banking was still being considered and asked unions to defer the strike. The UFBU declined to withdraw its strike call, saying there had been no definite development or timeline regarding implementation.
The unions have also raised several pension and service-related demands. These include resolving pending pension matters, updating pensions, introducing a uniform dearness allowance formula for pensioners and providing employees covered under the National Pension System with an option to shift to the old pension scheme.
The UFBU has additionally sought resolution of other outstanding service issues and objected to moving forward with a new charter for the next wage revision while earlier settlement-related matters remain pending.
The current round of industrial action could therefore lead to repeated disruptions for banking customers. The next three-day nationwide strike is planned for September 28 to 30, while an indefinite strike has been threatened from October 26 if negotiations fail.
The State Bank of India has already informed customers that its operations could be affected by the proposed strikes. The bank has said arrangements have been made to keep branches and offices operating as far as possible.
On Friday, bank unions urged employees and officers to participate collectively in the strike, describing the campaign as a demand for dignity at work and a better balance between professional and personal life. They also stressed that employees were sacrificing a day's salary by joining the protest.
The impact of the strike is expected to be strongest on branch-based services, particularly in public sector banks where participation has been significant. Customers may experience delays in cash-related services, cheque processing, documentation, KYC work and loan-related activities.
Digital services such as UPI, internet banking, mobile banking and ATMs are generally expected to remain available. However, transactions or requests requiring intervention from bank branches or back-office teams could still experience delays.
The level of disruption may also differ from one bank to another because employee participation is not uniform across all institutions. For customers, Friday's strike may therefore cause temporary inconvenience, but the larger concern is the possibility of further strikes later in September and an indefinite shutdown from October 26 if the dispute remains unresolved.
