One million bank workers strike across India
Around one million bank employees went on strike across India on Wednesday, a union representative said, demanding better pay and a government crackdown on companies who willfully default on loan payments.
Some 5,000 workers chanted slogans and waved banners at a protest in the financial capital Mumbai, union boss Devidas Tuljapurkar said, as they claimed they were paying the price for India’s mountain of bad debts, AFP reported.
The Asian giant’s troubled lenders have some of the highest levels of debt in emerging markets, weighed down by billions of dollars of non-performing assets (NPAS), also known as bad loans.
The two-day strike, which ends today, led to tens of thousands of branches of public sector and commercial banks downing their shutters, paralyzing operations in some parts of the country.
The strikers are unhappy with a proposed two-percent wage rise which they have been offered, noting that it is well below India’s inflation rate of around 4.5 percent.
India’s bad loan problem received national attention in March 2016 when beer and airline tycoon Vijay Mallya fled to the UK to avoid paying nearly $1 billion in loans that he owed banks.
Earlier this year the government said banks’ bad loans were worth more than $120 billion.
High debts mean banks are stretched too thin to lend funds for fresh investments, holding back economic growth.
The government is trying to help state-owned banks clean up their books and in October approved a $32-billion recapitalization plan for struggling lenders.
It has also given India’s Central Bank greater powers to intervene in cases of bad loans, and to order lenders to deal with their debts under new bankruptcy laws.
A sudden move in late 2016 to devalue 86 percent of India’s currency sparked long lines at ATMS and chaotic scenes at banks.
Many poorer Indians, reliant on cash, were left scrambling to buy basic necessities as their meagre savings evaporated in an instant.