Bank transactions and ATM withdrawals in India are expected to be hit when around a million employees of state-owned banks go on a two-day strike from Wednesday (May 30). Conciliation efforts by the Indian government failed to convince bank unions to call off the protest.

With most Indian employers expected to pay monthly salaries to their employees on Thursday, the closure of ATMs could affect cash withdrawals. However, online transactions should not be affected.

The country’s biggest lender State Bank of India and other prominent state banks such as Bank of Baroda, Canara Bank, and Punjab and Sind Bank are expected to be affected during the strike.

The strike was called by the United Forum of Bank Unions (UFBU), a representative body of nine bank unions, to protest over an offer of a 2% wage hike made by the Indian Banks’ Association (IBA), which represents finance ministry officials and bank management, and the delay in resolving their charter of demands.

Bank employees said the proposed hike was too meager considering the rise in their workloads and cost of living. They argued that they have worked tirelessly to implement various government initiatives such as Jan-Dhan Yojana, demonetization, Mudra and Atal Pension Yojana, among others.

The IBA has cited huge non-performing assets or bad loans at the banks as a reason for a modest hike, but bank employees say their wages should not be linked to bad loans.

In the last wage settlement, for the period from November 2012 until October 2017, the IBA gave a 15% wage hike.