RBI Workers To Strike Today, Banking Operations May Be Hit

About 17,000 employees of the Reserve Bank of India are set to go on strike today for better retirement benefits and to oppose reforms to the central bank, raising the prospect of disruptions to banks and markets.

Cheque clearance and foreign exchange transactions may get affected, due to the disruption of work at the central bank, especially if the agitations spills beyond a day.

The four unions that have called the strike say the reforms will reduce the RBI's regulatory powers and take away debt management operations away from the central bank.

The strike is the first at the central bank in six years.

Several senior officials who spoke to Reuters said they did not agree with the opposition to planned reforms, most of which have been amended to include suggestions from RBI Governor Raghuram Rajan, but all workers will nonetheless support the strike.

Unless the RBI announces contingency measures, the strike is expected to affect payment and settlements at banks and in markets, but is unlikely to have much impact on the final shape of reforms to the central bank.

"Employees of all departments including payments and settlement will participate in the strike," said Ajit Subhedar, President of All India Reserve Bank Employees Association.

The union is also opposing the proposed creation of a monetary policy committee that would include members of the government, seeing it as a curb on the RBI's decision-making powers.

The RBI did not have immediate comment on the impact on the strike or on potential disruptions to payments and settlements.

The uncertainty kept many banks away from government bonds on Wednesday with volumes falling to Rs 9,265 crore, less than half of its daily average.

The last time RBI employees struck work was in 2009, again for higher pensions.

Dr Rajan has supported the creation of a monetary policy agreement, although details about its composition have yet to be announced.

The governor has also agreed to ceding the management of debt to a special committee appointed by the government, though he has opposed several other recommendations including reduced power of foreign exchange regulation.