Collective bargaining in public sector banks is constrained by the Government's role as owner. Examine with reference to recent IBA–union negotiations.

In banking, collective bargaining happens through bipartite settlements between the Indian Banks' Association (IBA), which represents managements, and union platforms such as the UFBU [1][2]. In public sector banks (PSBs), the Centre is the majority owner and has the final say. That turns a two-party negotiation into a three-party process in which the party with the veto is not at the table.

How ownership constrains bargaining

• IBA can negotiate but not decide: On the Performance-Linked Incentive scheme for Scale IV and above officers, IBA can only "propose modifications to the Government" [1].
• Agreements stall at approval: Wage revision was settled under the 12th Bipartite Settlement [2]. The five-day week is still the unions' only outstanding demand in 2026 [3], because the owner has not approved it.
• The owner weighs different things: The Government looks at customer access, financial inclusion and fiscal cost, which are not IBA's to trade off. It ran conciliation rounds itself and appealed directly to PSB and RRB staff [3].
• Old promises remain open: "Residual issues" from the minutes of 8.3.2024 are still pending [1], which weakens unions' trust in new assurances.

Consequences seen in recent negotiations

• A cycle of strike calls and deferrals: Unions announced a one-day strike on 11 September, a three-day strike from 28 to 30 September and an indefinite strike from 26 October [3]. The three-day strike was deferred only after a high-level IBA–UFBU committee was set up [1]. That committee does not include the Government, which makes the final decision.
• Risk to public service: The three-day strike would have coincided with the half-yearly closing, effectively shutting banks for five days [3].

Where bargaining still works

• Wage settlements are still reached [2]. The Government has resolved one of the two major demands [3]. Repeated deferrals show that the dialogue channels still function [1].

Way forward

• The Department of Financial Services (DFS) should give a time-bound decision with clear conditions, such as branch hours or backup through digital channels and banking correspondents.
• DFS should join the IBA–UFBU committee.
• The pending 8.3.2024 items should be closed first.
• The next settlement should start early. The Government has already begun talks ahead of the November 2027 deadline [3].

Government ownership does not rule out collective bargaining in PSBs, but it does limit what the negotiating parties can decide. Bringing the owner into the process openly, and setting time limits for its decisions, would make settlements credible. That would protect both workers' welfare and customers' access to banking, in keeping with the Industrial Relations Code, 2020, which favours conciliation over confrontation.