India’s banking services could face disruption as the United Forum of Bank Unions (UFBU) has announced a nationwide strike on September 11, followed by a three-day strike from September 28 to 30, over the delayed implementation of a five-day banking week and objections to the government’s revised Performance Linked Incentive (PLI) scheme.
The unions have warned that if the issues remain unresolved, they will begin an indefinite nationwide strike from October 26. The UFBU says it represents more than 90% of India’s banking workforce through seven constituent unions.
The latest development is the intervention of the Office of the Chief Labour Commissioner (Central), which has initiated conciliation proceedings and scheduled a meeting for September 7, potentially providing a final opportunity for dialogue before the September 11 action.
Why Bankers Are Striking
The immediate dispute centres on two major demands: implementation of a five-day banking week and changes to the revised PLI framework. The UFBU says the five-day week was already agreed between the Indian Banks’ Association (IBA) and unions, with the proposal included in the 12th Bipartite Settlement/9th Joint Note signed on March 8, 2024.
Under the proposed arrangement, banks would remain closed on Saturdays while employees would work around 40 additional minutes from Monday to Friday, keeping weekly working hours broadly unchanged. The unions argue that the proposal has been pending government approval for more than two years.
UFBU General Secretary C.H. Venkatachalam said the unions had again raised the issue during an August 20 meeting with the IBA, warning that continued delay could lead to further industrial action. “The continued neglect of the Government and delay in approving the introduction of 5 days banking” would push UFBU towards further agitation, the AIBEA circular quoted him as saying. The unions also argue that institutions such as the Reserve Bank of India, LIC and GIC already operate on a five-day working pattern.
The PLI Dispute Explained
The second major flashpoint is the revised PLI scheme for senior bank officers. According to UFBU, the earlier PLI arrangement, introduced under the 2020 settlement, applied uniformly across employees and officers up to Scale VII and allowed an incentive of up to 15 days’ basic pay plus dearness allowance, depending on bank performance.
The unions object to a revised Department of Financial Services framework introduced for Scale IV officers and above, which they say is based on individual performance and can provide incentives of up to 365 days of basic pay.
The unions argue that the change creates a sharp disparity within the banking workforce. AIBEA said officers in Scale IV and above number about 40,000 out of roughly eight lakh employees and officers in public-sector banks around 5% of the workforce. It has described the revised formula as discriminatory and called for the issue to be discussed bilaterally rather than implemented unilaterally.
The dispute has continued despite negotiations. UFBU and the IBA met on August 20, with PLI as the main agenda, while five-day banking, branch security and pensioners’ dearness allowance were also discussed. According to the union account, no mutually acceptable resolution was reached. The unions have also said the government again directed banks to proceed with the revised PLI framework on August 21, while the matter remains under dispute.
What Happens Next?
The strike programme is deliberately staggered. Employees have been called for a one-day nationwide strike on September 11, followed by a three-day strike on September 28, 29 and 30. If negotiations fail, UFBU has announced an indefinite strike beginning October 26.
The Office of the Chief Labour Commissioner (Central) has now taken up the August 26 strike notice and scheduled conciliation for September 7, bringing the government, banking management and unions back to the negotiating table.
The timing could make the September action particularly significant for customers. September 11 falls on a Friday, immediately before the weekend, while September 28-30 would involve three consecutive days of industrial action.
Physical branch services such as over-the-counter transactions and other work requiring staff could therefore be affected, although digital banking services may continue to function. Customers with time-sensitive branch work may need to plan ahead.
The Logical Indian’s Perspective
Workers have the right to raise concerns about their working conditions and negotiate for fair treatment, just as customers have the right to reliable and uninterrupted access to essential financial services. This dispute affects both sides, which is why prolonged industrial action should ideally be the last resort.
The five-day banking proposal, the PLI framework and other pending service issues deserve transparent negotiations rather than an escalation that leaves employees and customers caught in the middle.
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