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As lockdowns disrupt banking services, states told to step in

Banks have been complaining that local government authorities have been forcibly shutting down branches, manhandling and preventing the employees from reaching their offices in many states.

Written by George Mathew
Mumbai | May 15, 2021 12:49:07 am
The IBA has advised its member banks to restrict business hours and stick to basic services in the wake of the rising cases of Covid-19 in the country.

With bank branches and employees across the country facing the issue of local authorities eagerly enforcing Covid lockdowns, the Finance Ministry has asked the state governments to ensure the safety of the bank employees and enable them to commute to their branches for the smooth functioning of the financial system.

Banks have been complaining that local government authorities have been forcibly shutting down branches, manhandling and preventing the employees from reaching their offices in many states. This has disrupted banking services in several places, leading to hardships for customers.

In a letter to the Chief Secretaries of states, the Finance Ministry said, “In addition to the request for the vaccination on priority, I would also like to draw your attention to some unfortunate instances which have taken place recently in different states and union territories where bank employees have been manhandled by state law enforcement authorities. Likewise, offices of banks and branches have occasionally been ordered to shut down even during permitted banking hours, accompanied by threats.” The Indian Banks’ Association (IBA), the apex body of banks in India, has already asked banks to curtain business operations to between 10:00 am and 2:00 pm.

Explained

The issues

Banks have been complaining that local government authorities have been forcibly shutting down branches, manhandling and preventing the employees from reaching their offices in many states. This has disrupted banking services.

“While bank employees are already braving risk to their health and need to be assured about their safety, these incidents result in the exact opposite and end up demoralizing them and their families, which leads to disruption in services,” Department of Financial Services Secretary Debasish Panda said in the letter. This becomes an impediment to account holders’ access to funds in their hours of need, disbursement of DBT payments, and extension of credit to mitigate disruption to business, which should otherwise be uninterrupted and seamless, the letter said.

“While you must be having a necessity to put in place restrictions on the movement of people and functioning of offices in your state, I draw your attention to the Union Ministry of Home Affairs order wherein the banking industry has been categorised as providers of essential services,” the letter said. Several states have ordered banks to function only on alternate days and cut down the banking hours. Banks have also cut down the number of employees present in branches and regional offices.

“Since bank staff have to necessarily commute from their homes to their offices and branches and the said officers and brands have to function and remain physically open, may I request your personal attention in kindly instructing all DMs (District Magistrates) and SPs (Superintendent of Police) and the other local authorities to co-operate with bank and financial services employees, provide adequate safety and security to them, and not hinder or impede their functioning or movement,” Panda’s letter said.

The IBA has advised its member banks to restrict business hours and stick to basic services in the wake of the rising cases of Covid-19 in the country.

Meanwhile, state governments are yet to announce any step to vaccinate the bank employees despite two letters from the Finance Ministry. “I once again request you to kindly consider putting in place a special dispensation for vaccination of these employees on priority. This would go a long way in boosting their morale and enhancing their enthusiasm for seamless provision of financial services,” Panda’s letter said.

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