Reuters Mumbai, India
Jul 29, 2016, 07.27 AM
A nationwide bank strike in India hit the public transactions like cheque clearances and cash deposits, but the vital treasury operations including a 150 billion rupee ($2.24 billion) government bond auction are unlikely to be affected, traders said.
Staffing in treasuries of banks are likely to be less than normal days but officials will ensure that functions like bidding at the auction will run smoothly, three traders at state-run banks said.
"Treasury people have been allowed to enter the head office of the bank, so there is no problem for us in trading or bidding at the auctions," said a senior trader at a large state-run bank.
However, there could be some issues in some banks settling the previous day's trades due to thin staffing.
"Settlement will be a problem at back office," said a senior official with State Bank of India.
The RBI was also not too worried about the impact of the strike on treasury operations and settlements of banks.
"There shouldn't be any problem. Primary dealers are also there to underwrite if needed. But auctions should go through smoothly," the official said.
An estimated 1 million bank staff are expected to strike work, opposing the government's proposal to merge State Bank of Indi's (SBI) associate banks with itself. In addition, unions are against the government's proposed move to privatise IDBI bank, formerly known as Industrial Development Bank of India.