India bank staff on two-day strike
BANK transactions and some market operations were affected in India yesterday after about 1-million bank employees began a two-day strike to protest against reforms that will give investors more clout in the tightly controlled sector.
The strike involving mainly staff of state-run banks, who make up about 70% of employees in the sector, underscored the opposition to investor-friendly financial reforms that have been pending for years. Foreign ownership of Indian public sector banks is capped at 20%, and some global banks have been pitching for a hike in their holding limit to expand their presence in the country by acquiring smaller regional banks.
In what is being seen by analysts as a positive step towards reform, parliament is likely in coming days to approve amendments to banking laws that include raising the limit on shareholders’ voting rights in public and private banks.
"Any move towards increasing the private sector role in the banking sector is a big fear for the unions and that makes them oppose it," said DH Pai Panandiker, head of the New Delhi-based RPG Foundation think-tank.
"The changes in the banking laws can improve the health of the banks quite considerably. The unions fear if the government continues with the reforms their positions will weaken and it will lead to job losses."
India has struggled to reform and liberalise key sectors such as banking, retail and insurance, partly because of political opposition and fears of the exploitation of domestic interests by foreign investors.
The strike, which forced State Bank of India to halt trading in onshore spot foreign exchange markets, comes as another blow to an economy facing its worst slowdown in almost a decade.
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