The year that went by was no different as unions went on an offensive after the Narasimham Panel report said that state-run banks will have to shed their excess baggage. "We will not support any VRS whether in the Reserve Bank or in the banking sector under any circumstances," chief of the CPI-led All India Bank Employees Association, Tarakeshwar Chakraborty, said.

Trade unions will also oppose tooth and nail any merger or acquisition plan as this will only increase the chances of a golden handshake, they say. This comes at a time when the Reserve Bank has initiated VRS in its own backyard. Deputy governor SP Talwar has said that if banks need to survive they will haveto cut costs by bringing down their work force and introduce computerisation.

The Reserve Bank is only following what has been laid out in the Narasimhan Committee report. The report had noted that overmanning in state-run banks was an increasing trend, while the availablity of staff with requisite skills and specialisation had declined. Trade unions obviously did not agree with this, and called for a stike in October. The strike was bunched with a number of holidays, which caused tremendous inconvenience to customers.

Meanwhile, the United Forum of Bank Unions (UBFU)--comprising five workmen unions and four officers' unions--has demanded a quicker negotiated wage settlement in the industry.

The forum has accused the IBA of adopting a "dilatory attitude" on the matter and warned of intensifying the agitation if its demands are not met.

The Indian Banks' Association--referring to policies of globalisation, privatisation and an ever-increasing portfolio of non-performing assets--has offered a 8 per centwage increase with prospective effect. The unions have rejected the offer demanding a 25 per cent hike in wages.

"We are for a negotiated settlement, but it must be expeditious and reasonable commensurate with the expectation of employees and officers," the forum has said.

The issues are vexed--both VRS and wage negotiations are sensitive subjects--and will decide the future of the industry in the coming year.