Indian banking operations and financial markets were heavily disrupted on Friday as 1 million workers went on strike to protest government pressure for mergers and reforms, to oppose outsourcing and to call for more staff.
Nine different unions, under the banner of the United Forum of Bank Unions, have joined the strike, and they threatened more strike action if their calls were not heeded. "When all the unions go on strike there is certainly an impact," said K.L. Gopalakrishna, executive director at the state-run Corporation Bank.
In New Delhi, more than 1,000 employees cheered speeches and chanted slogans on the wide front staircase of the main Parliament Street branch of the State Bank of India.
"We are certain that good sense will prevail," said V. K. Gupta, senior vice president of the All India State Bank of India Staff Federation in New Delhi.
"If it doesn't, if (the government) does not do what it should, then we are left with no alternative but to go on indefinite strike," he told reporters. He said the government had been told the unions would take that decision 15 days from now.
The strike is more widespread than one in July as it included 200,000 staff at the country's largest lender, State Bank of India group.
Many private sector banks such as ICICI Bank and foreign banks such as Standard Chartered were functioning normally as fewer of their staff are union members.
Traders said the absence of state-run banks had squeezed available cash in the money market and kept the overnight borrowing rate up near 7.00 percent, about 100 basis points above the central bank's benchmark rate, just as supply had looked to be returning to more normal levels after the Diwali festival.
"Volumes have thinned considerably and the state-run banks are hardly there in the market," said a currency trader at Bank of Nova Scotia.
Stock market transactions were not affected as their clearing banks were private sector banks, a stock exchange spokesman said. The Indian Banks' Association said banks were not expecting the strike to cause them much financial loss. Hundreds gathered on the Azad Maidan in south Mumbai, a public sports ground normally full of people playing cricket, carrying signs calling for a stop to contract labour and for 100,000 banking vacancies to be filled.