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Services in the public sector banks were hit for the second day on Thursday as staff and officers belonging to some unions went on a two-day strike opposing banking sector reforms and outsourcing of non-core activities. Normal banking operations, including cash transactions, cheque clearances, foreign exchange dealings have been affected owing to the strike that began on Wednesday. Around ten lakh employees took part in the strike led by the United Forum of Bank Unions, an umbrella organisation of nine unions of PSU banks. The bank unions have been demanding pension revision, housing loan revision and five-day working week. They are also protesting against the Banking Sector Laws Amendment Bill which seeks to remove restrictions on voting rights of foreign shareholders and increase voting rights of private investors in the public sector banks. The strike, which forced the country's lender State Bank of India (SBI) to halt trading in on-shore spot foreign exchange markets, comes as another blow to an economy facing its worst slowdown in almost a decade. If the Parliament approves the changes on Thursday, the limit on the voting rights of shareholders in private sector banks will be raised to 26 percent from 10 percent now, and to 10 percent for state-run banks from just one percent. The move would give overseas as well as Indian financial institutions and fund managers more say on the functioning of the banks and help improve operations and transparency, analysts said. The proposed changes in banking regulations would also help the central bank issue more banking licences, which would boost the prospects of many Indian and foreign firms who are looking to tap the country's under-penetrated financial sector.

Bank strike enters second day as services paralysed