Why is Banking Industry declared as Public Utility Service for a certain period

The Central Government can declare any service as a “Public Utility Service” for a certain period. In the “Banking Industry”, workers may go on strike at any time, which is not allowed in other Industries. But, no worker should go on strike without giving 3 weeks’ notice to the employer concerned and without getting the approval of the majority in a secret ballot among those entitled to vote. In this article, we’ll know Why is the Banking Industry Declared As Public Utility Service for a Certain Period? Definition of Public Utility Service, Banking services, and functions of the Banking Industry in India.

Definition of Public Utility Service

A Public Utility Service is a service that is indispensable for the community’s life. If such services are stopped, it will cause serious damage to the public and itself. Thus, examples include water supply, electricity supply, telecommunication services, railways, banking, insurance business, etc. Other than these examples of Public Utility Services, there may be other services that are declared as public utility services by the Central Government or State Government from time to time with the concurrence of the Central Government.

Declaring any industry as a “Public Utility Service” ensures that such essential industries do not suffer from industrial disturbance. Appropriate Government cannot refer the industrial dispute for compulsory settlement in the case of public utility service unless notice in writing requires that no strike or lockout shall be commenced or declared. No lockout or strike shall continue to be served on the employer, and he has failed to comply with such notice. To avoid inconvenience caused to the general public due to strikes called by workers in Banking Industry, Banking Industry has been declared a Public Utility Service (under section 2(n) read with Section 22(2)(b) of the Industrial Dispute Act 1947).

This is the definition of public utility service.

Why is the Banking Industry declared As Public Utility Service for a certain period?

Banking services are considered public utility services, declared under the Industrial Dispute Act of 1947. The rationale behind this declaration is that there are certain objectives of this Act. The first objective is to resolve the industrial disputes without any intervention from the Government.

The second objective is to prevent industrial disputes if it is impossible to resolve them. Under such circumstances, a provision has been made for strike with notice and lockout with notice in sections 22 and 23. Provision has been made in section 24 for a declaration that the Banking Industry be notified as a public utility service for six months. No strike or lockout can occur since stopping such service would adversely affect the general public.

The Objectives to solve through Public Utility Service

• Workers include all persons employed for production purposes, whether employed by an employer or self-employed
• The term “employer” includes every person who employs workers at rates or salaries
• They are not just the Utilities but also essential public services. These services should not be interrupted at any cost to society so they can enjoy their livelihood
• The public utility service is defined as the services whose failure or interruption would endanger or cause serious injury to the life and health of the community, like water supply, electricity, banking industry, railways, etc.

Banking services include the following:

• It provides the facility of transferring money from one place to another
• It provides the facility of saving money or storing money in safe custody by opening an account with banks
• Banks provide loans to businessmen and traders to enlarge their business activities
• It provides finance for industry, commerce, trade, and agriculture development by providing loans at a reasonable interest rate

The Indian Banking Industry’s mission is to provide financial services to all sections of society. This is in keeping with the national economic growth objective. This section will explain how the Indian Banking Industry has accomplished its mission.

Conclusion

A service can be declared a Public Utility Service only if it is indispensable or if its failure or interruption would endanger or cause serious injury to the life and health of the community. The courts have now accepted that a service that has become necessary for carrying on a trade, business, and industry may also be considered essential. Some examples of services that are considered necessary are the Production and supply of electricity, Banking services, and Telephone services.