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April 25, 2020

Govt declares Banking Industry as Public Utility Service : What does this mean ?

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Amid the Covid 19 pandemic which has significantly impacted economic activities, the Indian Government today declared the Banking Industry as a Public Utility Service for 6 months till 21st October 2020. The government made this move under the provisions of the Industrial Disputes Act.

What is Industrial Disputes Act ?

The Industrial Disputes Act, which was enacted on 11th March 1947 and came into force on 1st April 1947 has made provision for the investigation and settlement of industrial disputes and for certain other purposes. It regulates Indian Labour Law so far as that concerns trade unions as well as Individual workman employed in any Industry within the territory of Indian mainland.

What does this mean ?

Bringing banking services under the provisions of Industrial Disputes Act means that the banking sector would not see any strikes by employees or officers during the operation of the law starting from April 21. 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 deals with every 5 years. There are several issues on which the bank unions don’t agree with the decisions of the government. The latest is the merger of several banks.  

The notification was issued by the labour ministry and the circular has been addressed to the RBI Governor, SBI Chairman, Managing Directors and CEOs of nationalized banks, and the CEO of Indian Banks’ Association (IBA).

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