The Labour and Employment Ministry issued a notification in a news circular on the 17th of April 2020 against the backdrop of the COVID-19 pandemic outbreak which has significantly impacted economic activity.
The Union Government of India or the Department of Financial Services has declared the banking sector as a public utility service for 6 months till the 21st of October 2020 under the provisions of the Industrial Disputes Act.
Bringing the banking service sector under the provision of the Industrial Disputes Act means that the officers and the employees of banking sectors would not able to go on strike during the operation of the law.
As per the circular of the provision Department of Financial Services said that the Ministry of Labour and Employment declared through a notification on 20th April 2020 “Banking Industry as a public utility service” for six months with the effect from 21st of April, 2020.
The main purpose behind declaring the banking industry as a public utility is to ensure protection to the customers and to serve them in a better way, amid the economic crisis in the wake of the corona-virus pandemic.
The Department of Financial Services circular has been addressed to the RBI Governor, SBI Chairman, Managing Directors and CEOs of nationalized banks, and the CEO of the Indian Banks’ Association (IBA).
With the latest moves, officers and employees of the highly organized banking sector would not be able to go on strike besides certain other activities, according to an industry expert.
There are over a dozen employees and officers unions in the banking sector. These unions enjoy a considerable say in wage negotiations, which the IBA (Indian Banks’ Association) has to deals with every three years.
All public sector banks are a part of the Indian Banks’ Association such as ICICI, HDFC, Axis Bank and Federal Bank including HSBC, Citibank and Standard Chartered Bank are some of the old generation foreign banks also a part of it. All of these banks come under wage settlements and other employee issues that are taken up by IBA (Indian Banks’ Association).
In also addition, the new generation private sector banks such as Kotak Bank, IndusInd, and Yes Bank are outside the purview of IBA norms.