A one-week strike over pensions at the monolithic State Bank of India (SBI) has created havoc for Indian businesses and their international trading partners.

One of the tasks for bank staff to tackle now they are back at work involves clearing a huge backlog of letters of credit (L/Cs).

Walkout

Over 200,000 SBI employees walked out of their banks and offices on 3 April to strike for higher pensions. They and did not return to work until 10 April. In the meantime, companies could not access working capital while individuals found themselves short of salaries.

The 200-year-old Mumbai-based bank is also India's dominant player in foreign-currency, money and debt markets.

L/C backlog

Thousands of L/Cs have been stalled by the strike, but catching up on the backlog is not SBI's only priority. Contractual obligations on interest payments have not been met and cheques worth the equivalent of billions of US dollars are still to be cleared.

Apart from the damage to individuals, businesses and the Indian economy, the strike is expected to have a very negative impact on SBI, which has lost some large government customers, perhaps temporarily to other banks. The Uttar Pradesh government has transferred its business to Allahabad Bank.

SBI, which is about 60 per cent owned by the Reserve Bank of India, the nation's central bank, has 9,000 branches and around 100 million customers.

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