Policymakers fail to pay heed to TU grievances:

Tougher action in the offing

by Gamini Warushamana

Tougher trade union action in the next few days is inevitable as the government has failed to address the grievances of workers, Ceylon Bank Employees Union (CBEU) sources said.

Secretary of the CBEU (Peoples Bank branch) Ranjan Senanayake said the CBEU Executive Committee will decide the next course of action soon.

The banking sector was paralyzed last Tuesday as a result of the one-day token strike launched by the CBEU. Senanayake said that the CBEU will launch a strike with other trade unions against common issues that have arisen from the ill-prepared Budget.

CBEU sources said certain proposals in the Budget are detrimental to the banking sector. Trade Unions brought these issues to the notice of President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe and Finance Minister Ravi Karunanayake before the strike. “However, none of them responded positively nor were they ready to listen.

Even after the strike we have not been given an opportunity to discuss our grievances and, therefore, it is clear that tougher action is needed,” Senanayake said.

There are several key issues that bank unions perceive as threatening to the sector. The proposed new policy to manage State Owned Enterprises (SOE) is one. While reiterating that the government has no intention of privatizing SOEs, number 388 of the Budget proposals says; “As such, initially all SOEs will be brought under a Government-owned holding company similar to Temasek Holdings of Singapore.

“This public company would be operated on sound financial principles and market economics.

The shares of these enterprises will be passed onto a Public Wealth Trust (PWT), where the Secretary to the Treasury and the Governor of the Central Bank will be the custodians.

This Trust will be managed by a Board comprising members of civil society, trade chambers, and trade unions, who will be nominated by the Constitutional Council. The PWT is answerable to Parliament. A new Public Enterprise Act will be enacted to provide the legal framework.”

CEBU sources said that profit-making State-owned banks too are included in these SOEs. This PWT is the fund that was proposed to be set up by merging the EPF and ETF and, therefore it is obvious that the government is continuously trying to implement some scandalous proposals that they had agreed to scrap due to protests from trade unions.

Under proposal 214, 258, 259, 260 and 275 of the Budget, the banking industry will lose many of its profitable business avenues and some proposals are not clear and the authorities are not interested in clarifying these issues. Proposal number 214 states that the government will set up an EXIM bank with government seed capital of Rs. 50 million and list it in the CSE.

According to CBEU sources, all the commercial banks provide import and export credit and it is one of the main sources of profit for banks. Setting up of a separate EXIM bank will affect this business segment of the commercial banks.

“According to Budget proposal 259, banks should cease its leasing business from June 1, 2016, which is another blow to commercial banks. Proposal 260 restricts the pawning business of the banking

sector to a maximum of 5 percent of its loan portfolio. Pawning is also a profitable business for banks and it is the easiest borrowing channel of the common folk when in urgent need of cash.

Imposition of charges on cash withdrawals; 2% for withdrawals from Rs.1-10 million and 3% above 10 million, will discourage savings and it will also affect the banking industry,” Senanayake said.

According to proposal no. 275, monies lying in dormant accounts of commercial banks should be remitted to the Consolidated Fund of the government by January 1, 2016. “Money in dormant accounts belongs to customers and banks have a responsibility to return it to the account holders or their heirs on request. This is a plunder of peoples’ money,” Senanayake said.