Banking services, including the clearing and payment system of the central bank, were hit for about five hours on Wednesday after employees of the RBI went on mass leave seeking wage increase and updation in pension to keep up with rising living costs. The labour union leaders said the stir was also to protest against the government’s move to take away the central bank’s role in public debt management, besides seeking a strong role in the proposed monetary policy committee.

The clearing and payment system of the central bank resumed at 11 am with no impact on banking operations for the rest of the day.

Among the services that were affected in the earlier part of the day were cheque clearances, payments & settlements and forex transactions. Real Time Gross Settlement or RTGS, a central payment mechanism for transactions, was also not working when the markets opened for trading.

This led to a spike in the overnight call money market (market where banks borrow from each other to meet liquidity mismatches) trades with short-term rates gyrating from 7.40 to 5.77 per cent during the day before closing at 5.77 per cent. The benchmark rate at which banks borrow short-term funds from the RBI is 6.75 per cent.

Sources confirmed that about ₹20,000 crore worth liquidity was infused into the banking system as operations normalised.

Government bond trade volumes had dipped on Wednesday in anticipation of disruptions in settlement of trades the next day. “The volumes declined a tad but the impact of the strike wasn’t much as operations normalised in the morning itself. Rupee and dollar trade volumes were also less than normal (normal trade average at $10 billion),” said a dealer with a public sector bank.

Some bank officials had to personally visit the RBI headquarters to get certain work done but failed to do so. Except RBI Governor Raghuram Rajan, the entire workforce of the apex bank across its 20 offices were said to be protesting against the Central Government.

“Majority of the employees of the Reserve Bank of India were on mass casual leave today responding to a call given by the United Forum of Reserve Bank Officers and Employees. This led to thin attendance across various offices of the Reserve Bank. Resultantly, there were some interruptions to clearing and settlement operations of the Reserve Bank during opening hours of the day,” RBI said in a statement.

Services, however, resumed after the workers’ representatives were assured of action on their demands. “The management engaged with representatives of the United Forum and persuaded them in largely restoring normalcy, including in the operations relating to Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) systems,” the RBI said.

Explaining the reason for the mass leave by employees, Suryakant Mahadik, General Secretary of the All India Reserve Bank Workers’ Federation, said, “About ₹14,000 crore worth pension has been cut from our employees’ salaries since 1992. We have the right over those funds. The RBI Governor and the Board are convinced about our demands and we have been assured (by the management) that it would be taken up with the government.”

He added that the protest will get more aggressive if their demands are not met.

Mahadik said that the number of employees at the RBI has declined from 40,000 in 1980s to 20,000 now amid retirements and no new recruitments with the increase of technology and outsourcing of forex and cash department operations.