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Ajay Vohra, a resident of Rana Pratap Bagh, in Delhi runs a small dealership in north Delhi. Almost all the payments he receives from customers are bank transfers, and the payments he makes are also through net banking and UPI (unified payment interface). When he learnt that the bank services are halted on Monday because of bharat bandh, he couldn’t suppress his smirk, for his business was barely dependent on the physical dealings at his bank branch, at least not anymore.
Similar is the situation with most urban traders, customers, professionals, students and almost everyone in between. A total of 7,422 crore digital payment transactions were recorded during in the fiscal 2021-22, up from ₹5,554 crore transactions seen in FY 2020-21, said the Ministry of Electronics and IT (MeitY).
The bank unions are protesting against the government’s decision to privatise two banks as announced in Budget 2021-2022. The unions are also demanding an increase in interest rate on deposits and reduction in service charges.
This impacted the banking services on Monday when some workers didn't join work. There was not any impact on the private banks where most banking operations are mapped to the net banking.
In the ongoing strike, not bank employees are taking part. Reports suggest that branches are open and officers are present, but services are still impacted since many employees have participated in the strike. Most of the banks apprised their customers in advance about the proposed strike and the likely impact, it would cause on the services.
Digital banking
One might wonder how can stalling of work at physical branches put brakes on the banking system in India. As we all know whether it is the deposit of money, or withdrawal, it can be effectively done at an ATM. The transfer of money is easily carried out via net banking to anyone and everyone. From making credit card bill payment to applying for a new debit card – net banking services of any all banks take care of everything.
Through net banking, customers can make bill payments, enquire and transact about their credit & debit card, make investment in mutual funds, buy an insurance product across insurers, remit the money abroad, transfer cash to other bank or even within the bank, and much more.
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Most banks — private as well as PSU — have also launched their customer-friendly applications which enable the users to do everything from transfer of money to sending an application of loan.
On these apps – one can even request numerous services such as those for cheque books, account statement, TDS certificate, FATCA declaration, interest certificate, aadhaar update, nominee registration, status inquiry of cheque, among others.
One can also use mobile wallets and UPI for money transfer, thus eliminating the need to go to bank at all. Increasingly, Indian consumers are relying on PhonePe, Google Pay and other UPI platforms for their cash transfer needs.
It is worth noting, however, that these services are aided by human staff at the backend. For technical updates and maintenance, the engineers have to ensure that the digital operations are running smoothly. Any strike, if goes on for long, may cause more intense impact in the medium to long term, albeit not immediately.