Four-Day Bank Strike Averted as Deal Reached on Wage Hike, Holidays

Ahead of the Budget, the Indian Banks' Association, which represents lenders, managed to avert a four-day strike starting February 25. Employees of state-run banks will get 15 per cent wage hike and alternate Saturdays off, according to the agreement.

The wage hike will be applicable from November 2012 and will be valid for five years. The bank unions were demanding a 19 per cent hike in wages and a five-day work week.

Unions reached the wage settlement after 18 rounds of negotiations over more than two years, Vishwas Utagi, a senior union official, said. The new salaries, applicable for more than 7 lakh bank workers, will be backdated to November 2012 and valid for five years, he said.

Mr Utagi said the estimated cost for banks as a result of the salary increase will be an annual Rs 4,725 crore.

A strike would have paralysed some of the country's largest banks, crippling cash transactions and cheque clearances in an economy where card payments are still unusual. It would have dampened money market and foreign exchange trading volumes, potentially increasing volatility.