RBI Staff Strike Hits Some Banking Operations

The Reserve Bank of India’s settlement systems for banks and markets were not functional so far in the day as about 17,000 employees went on a strike called by unions, several traders said on Thursday.

“Usually RTGS (real-time gross settlement) starts early morning,” said a dealer. “Today there is no settlement happening so far.” Another trader said market settlement applications run by the central bank were also not fully functional.

RTGS or real time gross settlement is a mechanism used for interbank transfer of funds though electronic means. This fund settlement takes place through the RBI and is primarily meant for large value transactions.

For the first time in six years, the 17,000-strong unionised employees of the RBI are on a one-day strike on Thursday opposing the various reform measures being taken at the central bank and also seeking better retirement benefits.

The unions are opposing the government move to take away the public debt management activities from the central bank and curtail its powers on the monetary policy.

The Finance Ministry is giving the final touches to shift government’s debt management functions from the RBI to the proposed Public Debt Management Agency (PDMA), which will also function as depository of government securities (G-Secs). The unions are opposing the proposed creation of a rate-setting monetary policy committee that would include members of the government.

RBI Governor Raghuram Rajan has, however, been in support of the new monetary policy framework as well as creation of the public debt management agency.

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