LIC employees raise slogans against the LIC Initial Public offer (IPO) during their ‘Two-Hour Walkout’ strike, in New Delhi, on Wednesday,
LIC employees raise slogans against the LIC Initial Public offer (IPO) during their ‘Two-Hour Walkout’ strike, in New Delhi, on Wednesday, | Photo Credit: Manvender Vashist

Keeping all ‘ASBA’ designated branches open for public on May 8 (Sunday) to facilitate processing of applications for Life Insurance Corporation of India’s (LIC) IPO would entail payment of overtime to all employees attending offices/ branches, resulting in avoidable expenditure for banks, according to a trade union.

The All India Bank Officers’ Confederation (AIBOC), in a letter to RBI Governor, said: “With the closing date (of LIC IPO) being on May 9...we fail to fathom the reason for the RBI Notification for opening the Branches on Sunday.”

Referring to the government’s massive digital banking initiative and banks having existing platforms with various companies, which offer online Demat service and applications 24x7 for the customers to subscribe for the IPO, Soumya Datta, General Secretary, AIBOC, observed that the opening of branches on a Sunday cannot be substantiated by any cogent logic.

Datta emphasised that since all bank branches are on CBS (core banking solution), all branches will be considered as ASBA (Application Supported by Blocked Amount) designated Branches.

“State Bank of India alone had 22,219 branches in March 2021 and there are 2,45,652 employees. As per your instructions, all these branches will have to remain open on a Sunday and all the employees attending offices/ branches have to be paid an overtime as per the factories act.

“If we take the average overtime as Rs 5000, it would cost a staggering Rs 122.8 crore to keep the branches open for public in the case of SBI alone,” Datta said.

Avoidable dent on bottomline

He assessed that the expenditure for the entire banking industry would a few hundred crore of rupees, which will be an avoidable dent in banks’ profitability.

“Even if two staff are requisitioned, it will be Rs.22.21 crore which will be a colossal waste as no work is expected to be performed. Most of the branches have not had even a single application for the IPO in the last 2 days,” Datta said.

Considering extensive usage of online subscription of IPO among the investors, the Confederation is of the considered view that most of the branches will not get even a single application on Sunday in the physical format.

“In such circumstances, the decision to keep open all the bank branches is per se farcical as banks cannot afford to bear such humongous expenditure which will not yield any tangible result.

“This has naturally created angst and displeasure among the officers fraternity of the banks, who are actually the drivers of the industry,” Datta said.

Highlighting that the officers and employees of RBI and LIC enjoy a 5 day week but bankers are required to work on every 1st, 3rd and 5th Saturday, he underscored that it is a conundrum that “bankers will be requisitioned to work on Sunday, the 8th May 2022 at the instruction of RBI to ensure the success of the LICI IPO!”