Feature Post

UFBU Calls Off Nationwide Bank Strike on 24th and 25th Mar 2025 After Assurances from Finance Ministry and IBA

I n a significant development on March 21, 2025, the United Forum of Bank Unions (UFBU) has decided to call off their two-day nationwide strike, which was originally planned for March 24 and 25. This decision was made after the UFBU received positive reassurances from both the Finance Ministry and the Indian Banks’ Association (IBA) regarding their key demands. The banking unions, under the umbrella body of UFBU, represent employees from nine major unions across the country, including AIBEA, AIBOC, NCBE, AIBOA, and BEFI. The unions had earlier called for the nationwide strike to protest against several ongoing issues that they believe impact the welfare and job security of bank employees. Key Issues Behind the Proposed Strike The strike was initially called by UFBU to address a range of pressing concerns, some of which have been lingering for years. The union's main demands included: Five-Day Workweek for Bank Employees:  One of the most anticipated demands was the implementation o...
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MCLR (Marginal Cost of Funds based Lending Rate)


1. New Lending Rate effective from April 2016.​
2. To improve the efficiency of monetary policy transmission.​
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Following are the main components of MCLR - 

 1. Marginal cost of funds;​
2. Negative carry on account of CRR;​
3. Operating costs;​
4. Tenor premium.​
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The main components of base rate system are - 
• Cost of funds (interest rates offered by banks on deposits)​
• Operating expenses to run the bank.​
• Minimum Rate of return ie margin or profit​
• Cost of maintaining CRR (Cash Reserve Ratio).​
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Marginal Cost of funds (MCF): The marginal cost that is the novel element of the MCLR. It has 2 components 
(a) Marginal cost of Borrowings 
(b) Return on Networth​

 Negative carry on account of CRR is the cost that the banks have to incur while keeping reserves with the RBI. The RBI is not giving an interest for CRR held by the banks. The cost of such funds kept idle can be charged from loans given to the people.​

 Operating cost: is the operating expenses incurred by the banks​

 Tenor premium: denotes that higher interest can be charged from long term loans​
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As per the new guidelines, banks have to set five benchmark rates for different tenure or time periods ranging from overnight (one day) rates to one year i.e overnight, one month, three month, six month and one year.​

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