Banking operations across the country were hit on Wednesday, as 10 lakh employees, primarily from public sector banks, went on a 2-day strike to protest a “meagre” 2% salary hike offered to them by the Indian Banks Association (IBA), a body of banks’ management.

The strike, also supported by employees of some old generation private sector banks and foreign banks, will continue on Thursday.

Operations in the new-generation private banks like ICICI Bank, HDFC Bank, Axis Bank, however, were almost normal, barring a few activities, including cheque clearance.

Disruptions in banking services were reported from various states. The impact was most severe in states like Kerala, West Bengal, Bihar and Jharkhand.

Nearly 10 lakh employees, working in various branches of 21 public sector banks, 13 old generation private sector banks, six foreign banks and 56 regional rural banks across the country participated in the strike as IBA offered them a nominal wage revision, All India Bank Employees Association (AIBEA), affiliate of UFBU said in a statement.

Since the strike coincides with the month-end, salary withdrawals from branches are likely to get affected. Some ATMs went dry by the evening.

Operations like deposits, fixed deposits, renewals, government treasury operations, money market operations were hit by the strike.

An RBI official said some digital banking work was done through electronic systems like RTGS , but the functioning of the banks’ servers was hit.

Digital banking comprises about 5% of the total operations, the official said.

The Reserve Bank of India remained operational, though the trade unions offered moral support for the ongoing strike, a RBI Trade Union leader said.

As several rounds of talks between banks and the unions of their employees did not make any headway, the United Forum of Banking Unions (UFBU), an umbrella body of nine bank unions, has gone on strike against the proposed wage hike of 2% as against 15% given last time, All India Bank Employees Association (AIBEA), general secretary C H Venkatachalam said.

“It is a kind of insult to the employees of public sector banks...to be offered this kind of meagre hike. We had no other option but to go on strike, forgoing two days’ salary,” All India Bank Officers’ Confederation (AIBOC) joint general secretary Ravinder Gupta said.

Success of all government schemes like Mudra, Jan Dhan and demonetisation were ensured by public sector bankers but the reward is just 2% hike, he said, adding that it is gross injustice to bankers who have worked very hard for nation building.

Employees are participating in the nationwide strike as part of “our democratic right” by forgoing our salary, Venkatachalam said.

The IBA has asked the six banks including SBI, Oriental Bank of Commerce, Union Bank and Bank of Baroda to reconsider their decision and allow IBA to settle wages for bank employees up to scale seven instead of up to scale three employees.

There are about 85,000 branches of 21 public sector banks across the country having business share of about 70 per cent.

Most of the banks, including SBI, PNB and BoB, have already informed their customers about functioning of branches and offices due to strike.

Industry chamber ASSOCHAM said the two-day nationwide bank strike may affect customer transactions worth up to Rs 20,000 crore.

It also urged the government to come up with a stimulus plan for restoring the health of PSU banks.

State-owned lenders are grappling with high levels of bad loans and as per reports their losses for the quarter ended March 2018 are set to hit a record Rs 50,000 crore which is more than double the losses of Rs 19,000 crore in preceding quarter ended December 2017, ASSOCHAM said in a statement.