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Bank strike seen unlikely to disrupt markets

business Updated: Aug 20, 2008 08:37 IST

Reuters
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A strike called for Wednesday by some banking unions protesting consolidation of state-run banks may partly affect banking operations, although the Bombay Stock Exchange said settlements were unlikely to be impacted.

Three unions representing about 600,000 workers will stage demonstrations and rallies late on Tuesday and Wednesday, a union leader said. Not all bank unions are involved in the strike.

"We are not convinced about the need for any consolidation in the sector," C.H. Venkatachalam, convener of United Forum of Bank Unions, said. "All unions will meet on Aug. 21 to decide the further course of action."

The unions represent workers at state-run banks and foreign banks, but officials at newer private banks such as ICICI Bank, HDFC Bank said they would be unaffected as they had no unions.

The Bombay Stock Exchange and National Stock Exchange had delayed settlements during a strike in January when about 900,000 bank employees stopped work.

But a Bombay Stock Exchange spokesman said settlements were unlikely to be affected this time and trading would continue as usual.

Debt, currency and swap market trading are unlikely to be affected much by the strike but cash rates may tighten as state-run banks are the biggest lenders in the money markets, the head of trading at a foreign bank said.

Venkatachalam said the unions opposed the government's decision to allow State Bank of India, the country's largest bank, to absorb its associate State Bank of Saurashtra.

However State Bank of India Chairman O.P Bhatt earlier in day said there was no employee backlash due to the merger.

State-run Bank of Baroda and Indian Bank said they saw limited impact as not all unions were part of the strike.