The United Forum of Bank Unions (UFBU), an umbrella organisation representing seven bank unions and around eight lakh employees, has announced a three-day nationwide bank strike from September 28 to 30. The unions have also warned of an indefinite strike from October 26 if their demands remain unresolved.

The unions claim to represent nearly 90% of the banking workforce. Their key demands include the implementation of a five-day banking week, changes to the government’s performance-linked incentive (PLI) scheme, bilateral discussions on the incentive system and the resolution of other pending issues.

However, the five-day banking week remains the main point of disagreement between the unions and the government. The proposal has been pending for more than two years. The Indian Banks’ Association (IBA), which represents banks in India, had agreed to the demand and forwarded the proposal to the government for approval.

Why Are Bank Unions Going on Strike?

The introduction of a five-day banking week remains the biggest unresolved demand for bank employees. Currently, bank branches remain closed on the second and fourth Saturdays of each month. However, branches generally operate on the first, third and, where applicable, fifth Saturdays.

The unions want all Saturdays to be declared bank holidays. The demand dates back to earlier wage negotiations. The IBA had previously agreed to the existing system of two Saturday holidays each month. During subsequent wage discussions, the proposal to declare all Saturdays holidays moved forward with an understanding that banks could increase working hours from Monday to Friday to compensate.

According to the unions, this arrangement would not reduce customer-facing working hours because the additional working time would be spread across weekdays.

“From the UFBU, we pointed out that there is no response to our demand for implementation of 5 Days Banking which was agreed and signed in March, 2024 under the last wage revision settlement. Hence, we are going ahead with the strike action,” UFBU said in a letter to various unions and members.

PLI Scheme Becomes Another Major Issue

The performance-linked incentive scheme is another major source of disagreement between bank unions and the government. The PLI system was introduced under the 2020 wage settlement and linked incentives to the performance of individual banks. However, a revised government scheme for senior bank officials has faced opposition from bank officers’ associations.

The revised system covers Grade 4 and above officers while excluding employees in lower grades. Bank officers’ associations have raised concerns about how the revised incentive structure distributes benefits among employees. As a result, the unions have demanded changes to the PLI system and bilateral discussions on the scheme.

How Will the September 28-30 Bank Strike Affect Customers?

The timing of the proposed strike could increase its impact because September 30 marks the half-yearly closing date for banks. This period is important for several banking activities, including reconciliation, provisioning, treasury operations and market-related work.

Moreover, the strike will begin immediately after the September 26-27 weekend. Therefore, customers could face difficulties accessing physical banking services for several consecutive days.

Public sector bank branches are likely to experience the biggest impact. Customers could face disruptions in services such as cash deposits and withdrawals, cheque clearing, account-related work and other branch-level transactions.

However, the strike will not completely shut down banking services.

Digital banking channels such as UPI, internet banking and mobile banking are expected to continue operating. ATMs are also expected to remain available.

State Bank of India and other public sector banks have advised customers to complete important or time-sensitive branch transactions before the strike. Customers can also use digital banking platforms and ATMs during the disruption.

Private sector banks are expected to face less disruption because the strike primarily involves participating unions and public sector banking operations.

Why Are Banks Opening on Sunday, September 27?

The government has decided to open public sector banks and Regional Rural Banks on Sunday, September 27, ahead of the three-day strike.

Normally, Sunday is a bank holiday. However, the government wants customers to have an additional opportunity to complete essential banking transactions before the strike begins.

Without the Sunday opening, customers would face the September 26-27 weekend followed by the three-day strike from September 28 to 30. As a result, physical banking services could effectively face disruption for five consecutive days.

The Finance Ministry therefore asked banks to open on September 27 to reduce the impact on customers.

The Reserve Bank of India has approved the full operation of bank branches, offices, ATM-linked branches and currency chests on September 27.

What Happens If the Strike Is Not Resolved?

The immediate focus remains on whether the government and bank unions can resolve the disputes over the five-day banking week and PLI scheme before September 28. If the issues remain unresolved, the unions have threatened to launch an indefinite strike from October 26.

Therefore, the next few weeks could remain important for negotiations between the government, bank managements and employee unions.

What Is the Government’s Response to the Bank Strike?

The government and bank managements have urged the unions to defer the proposed strike and continue discussions.

The Finance Ministry has said that the five-day banking proposal remains under consideration. It has also indicated that several stakeholders need to be considered before the government takes a final decision.

Meanwhile, the government has started contingency measures to reduce disruption. The Finance Ministry has asked public sector banks and Regional Rural Banks to maintain adequate cash availability in ATMs and take steps to ensure essential banking services continue during the strike.

The IBA and Department of Financial Services (DFS) also participated in conciliation meetings conducted by the Labour Ministry. During these discussions, the IBA and DFS agreed to keep the PLI scheme in abeyance.

The DFS representatives said the five-day banking demand was still under consideration, although they could not provide a specific timeline for a decision.

“However, apart from the 5 days banking, there are a lot of welfare measures Government has taken in the past for the bank employees and still taking including initiation of the process of 13th bipartite settlement,” the Office of the Chief Labour Commissioner in the Ministry of Labour said in a note.