In the old days, this strike would have been headline news, creating a crippling effect on many parts of the economy, not to mention widespread aggravation to millions of consumers. But in 2005, it was overshadowed by the Modi visa controversy and the ongoing India-Pakistan cricket series. The strike was, of course, an annoyance to many traders, exporters and currency operators. But the fact is that almost two-third of the countrys saving and deposit mobilisation remained unaffected. Why Simply because private and foreign banks worked as usual. The strike was, at worst, another uncomfortable reminder of the old patronage economy, one that was totally removed from common sense, reason or accountability.
This raises the question: why have foreign banks in India been able to minimise union unrest in the past 10 years In fact, major banks, like Citibank and Amex, are no longer unionised (as compared to 1970, when Citibank had 2.33 union workers for every one non-union worker), while other banks, like Banque National de Paris and Standard Chartered, no longer have unions that are hostile. One reason for all this is, undoubtedly, higher wages and better working conditions, with salary data showing how foreign banks are far more liberal employers than Indian banks, public or private. Whether this is by accident or history or design, it has significantly blunted union rhetoric against multinational banks.
Another reason is the inevitable march of banking automation. India is still miles behind most countries and in many instances automation is still very primitive. Plus, it is only in India that you have the bizarre spectacle of full-page newspaper ads taken out by public sector banks that extol the opening of our first fully computerised branch in East Delhi (to top this wasteful expenditure, the whole country is also cordially invited to the grand opening). All these point to a really serious attitudinal problem in adjusting to a world of efficiency, but regardless of this, there is no stopping computerisation.
Since 1983, when an industry-level agreement was reached between labour unions and the Indian Banks Association, almost 15% of all PSU bank branches in the country have been computerised. All unions have accepted the inevitable, including those who earlier opposed computerisation with vehemence (one major union leader from the 1980s is on record as having said, There are no skills involved in operating computers and these only deaden your mind. We cannot participate in such a process).
On top of everything else, and this could perhaps turn out to be the biggest determinant, there has been a sharp rise in women employees in private and foreign banks, a trend that has dramatically changed the larger dynamics of union politics. The proportion of women employees in lower-to-medium grade posts in all banks in India has increased from 5% in 1970 to over 55% in 2000, a figure that is even higher in foreign banks. And, generally speaking, women employees in banks have been keen learners of and adaptors to computers, the EDP department perhaps offering them a measure of protection against transfers to remote areas. As per an ILO report, the new generation of bank and insurance employees in India, especially women, are serious about their work, less interested in union activity and no longer look at the unions as an expression of their aspirations.
The fact is that despite all the contrived thunder of union machismo, work is being rationalised, jobs are being cut and staff is being redeployed. In a larger sense, and against an overwhelming abundance of public opinion, economic evidence, global lessons and even demographic trends that are all against them, bank unions are so much on the defensive, fighting a last battle of sorts. In recent times, their priority has so clearly shifted from demanding greater pay and less work to protecting jobs.
Any union leader will typically portray policy reforms either as a public disaster, or as a capitalist conspiracy. Never mind that it is now overdue for the country to reduce waste, make public employees accountable for their lethargy and arrogance and create a truly service-oriented work culture. While labour unrest is far from dead, the good news is that the impact of union activity in everyday lives of most people has decreased sharply in recent years. Unless you have lived in India through the wretched 70s and 80s, it may be difficult to fathom how this is one of the most amazing, positive and, yet, a somewhat unappreciated aspect of Indias economic transformation in the last decade.
The writer is editor, India Focus