No role in bank-staff disputes: RBI tells Gujarat high court on bank strikes

AHMEDABAD: The Reserve Bank of India (RBI) on Tuesday told the Gujarat high court that though it has powers to take action against striking bank employees, the issue of ‘strikes’ does not fall in the ambit of banking policy and it has “no role in enforcement and implementation of regulations” framed by banks.
The RBI was responding to a PIL filed by trade federations of Gujarat seeking HC directions against employees of public sector banks saying that such strikes are against the public interest.
The HC asked the RBI whether it has any powers to act against striking bank employees.
The RBI has said, “Every bank has its own regulations on conduct and discipline of its employees and the RBI has no role in enforcement and implementation of such regulations. Even otherwise, there are separate labour laws to deal with the issue of strikes by employees.”
The RBI further said that it has supervisory and regulatory powers and powers to determine banking policy. It can act against employees of banks, if it feels that their actions are against the interest of monetary stability or sound economic growth. The RBI said that it has power under Section 35A of the Banking Regulation Act “to issue directions to banking companies generally or any banking company in particular, where it is satisfied that in public interest or in the interest of the banking policy or to prevent the affairs of the banking company being conducted in a manner prejudicial to the banking company or to secure the proper management of any banking company generally…but at the same time, it is relevant to state that disputes between the banks and their employees/union would not fall within the ambit of banking policy as defined in the Act.”
The RBI also asserted that it can issue directions to banks, but the trade federation cannot seek HC directions to RBI to exercise its discretion.
The hearing was adjourned by the court after it was submitted that the bank managements and employee unions are likely to hold meetings to resolve issues that were the cause for the strikes.