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Union Bank's Shift to Digital Rupee for Employee Benefits Stirs Bankers
The employees are not quite happy with Union Bank’s decision to credit employees benefits to the Central Bank Digital Currency (CBDC) wallet. The employees federation has opposed the move in their letter to the management.
Author: Abhivad
Published: January 9, 2024
The Union Bank of India(UBI) in its recent circular, announced that the employee benefits will be transferred to the Central Bank Digital Currency (CBDC) wallets instead of direct credit to the salary accounts. Initial step in this transition to digital currency involves the reimbursement of the cost of newspapers, which will now be credited to the CBDC wallet. Earlier, the bank used to credit the cost of daily newspapers as claimed by the employees to the respective salary accounts. The new circular indicates that the bank plans to shift various employee benefits to digital rupee over the period. However, this first such move in the country has left many employees of UBI dissatisfied.
Digital rupee, introduced as India's Central Bank Digital Currency(CBDC), is a digital version of the national currency backed by the Reserve Bank of India (RBI). Launched on 1 December, 2022, the retail CBDC pilot has been operational in more than 15 cities. Currently, 13 banks provide this facility to their customers. However, guidelines issued to all Public Sector Banks (PSBs) mandate 100% employee registration on the CBDC wallet, effectively making it mandatory for employees to sign up for the Digital Rupee app. This move, ostensibly aimed at promoting the use of the Digital Rupee, has triggered unrest among the bankers.
The All India Union Bank Employees Federation has formally communicated their objections to the Managing Director & CEO of the UBI. The letter, assessed by Kanal, demands the withdrawal of the circular, expressing their discontent over the unilateral imposition of such reforms without employee consultation.
Bipul Banerjee, the All India Joint Secretary of the Bank Employees Federation of India (BEFI), criticised the decision as autocratic. Speaking to Kanal, he highlighted that not all employees are familiar or comfortable using the Digital Rupee app. In addition, the limited integration of the app into daily transactions further restricts employees' convenience to transact the credited amounts as they wish, Banerjee pointed out.
Meanwhile, the Digital Rupee has achieved a milestone, crossing 1 million transactions in a day for the first time on December 27. This surge can be attributed, in part, to the collaboration of banks and their employees in promoting the use of the Digital Rupee app.
Union Bank's decision to transition employee benefits to the CBDC wallet has sparked a broader conversation about the balance between technological advancement and the practical concerns of the workforce. The discontent among employees reflects the challenges of implementing such reforms without comprehensive communication and employee engagement.