Bank unions party without a care as economy chokes

Raghu Mohan

Sometime back, Mumbai’s citizenry took to the streets after Sharad Rao and his cronies turned off the city’s water taps. Like action is now warranted with bank unions’ deciding to go on a one-day strike last week over Standard Chartered Bank’s (StanChart) so-called misdeeds pertaining to its early separation scheme (ESS), transfers, contract labour; and by calling attention to its role in the securities scandal of 1992!

Recession or not, bank unions care two hoots about choking the national economy in an inherently capital deficit country. The timing was beautiful. A strike on Friday meant that inter-bank and clearing house operations get fully settled only on Monday with Saturday’s half-day and an intervening Sunday. Unions partied last Friday with a rally from StanChart’s head-office to Azad maidans right in the centre of the country’s financial capital.

Says hero-of-the-hour, All-India Bank Employees’ Association’s (Aibea) president SD Dhopeshwarkar: "StanChart has flouted all rules. You cannot transfer employees just like that. The bank’s regional general manager, Jaspal Bindra, refused to meet us despite numerous letters." But what about inconvenience to their countrymen? Comrade in arms, Aibea’s joint secretary LK Nagda, is pretty clear: "It is simple... just ensure that we do not have bank’s like StanChart."

StanChart, on its part, did not want to join issue with the unions in the media.

But for Mr Bindra, these are testing times indeed. He has never faced a situation like this in his earlier stints with Bank of America (far too junior), Union Bank of Switzerland (was a niche outfit) or in StanChart (joined as corporate-banking head and Martin Fish was around). The task is doubly tough as both StanChart and StanChart Grindlays have baggage usually associated with state-run banks. StanChart managed to pull through an ESS in 1998 under Mr Fish with over 1,000 staffers opting for it.

But times are different now. Unions are seeing their constituencies diminish. Feeling emasculated, it is, therefore, a fight before the proverbial last gasp.

More so with several state-run banks downsizing. Pressure is also on the unions given that even the top brass of the Reserve Bank of India (RBI) have voiced concerns over strikes in recent times, not to mention individual bank chairmen.

The desperation of the unions is evident from a letter written to Mr Bindra by Mr Dhopeshwarkar on December 29, 2001. It quotes a report from the 20th December edition of Marathi daily Navkal, which states that a terrorist, Afroj, connected to the Al-Quaida had availed of Rs 7 lakhs from StanChart’s Delhi branch; that the bank is now acting as a conduit for such terrorists; that the erstwhile ANZ Grindlays Bank had in the early 1960s shown Kashmir as being part of Pakistan. Amazingly, Mr Dhopeshwarkar expresses his "astonishment" at these acts of the bank!

In this particular strike, the dispute is over transfer and contract labour. Labour minister Sharad Yadav has been called upon to intervene and put a stop to the "anti-labour" policies of StanChart like employing contract labour and coercing staffers to leave with compulsory retirement schemes in the garb of the voluntary.

Support was available for the strike: the All-India LIC Employees Federation, General Insurance Employees’ All-India Association as also the Kamgar Sanghtana Kriti Samiti helped.

The bank’s clearing house operations were affected. Officials owing allegiance to unions raised hackles as cheques were being handled on StanChart’s behalf by Scope International Pvt Ltd -- which handles its back-office operations including clearing -- and that clearing house regulations required that only permanent officials of a bank present instruments for clearing, and not those on contract. Scope International is part of the StanChart fold.

In the run up to strike last week, efforts to defuse the situation failed. The unions claim that "reasonable suggestions" like keeping the controversial transfers in abeyance or reviewing the transfers through a committee consisting of a member each from Aibea, Indian Banks’ Association and StanChart were spurned. As also a request to pay the transferred salaries during the review period. StanChart, on its part, claims that it is well within its right to transfer staff to meet its changing business needs as supported under the Sastry Award. The bank intends to make Chennai its back-office hub, and therefore, transfers are within its management rights. It also called attention to a Calcutta High Court Order on December 4 in support of its actions. All these though are debunked by the unions as propaganda.

Queried over the fact that the unions never went on a strike during several other scams in the 1990s or the recent one involving Ketan Parekh and the Madhavapura Mercantile Co-operative Bank, Mr Dhopeshwarkar says that the unions were against such activities!
A strike call over the transfer of a handful, however, wrong? "It is our moral responsibility to come to the aid of members whenever injustice is meted out... it is not that we love going on strikes," says Mr Nagda.

Rebels or just plain bad boys? Union leaders have to do some soul searching. For the citizenry is watching.