Mumbai: Finance minister P Chidambaram has sought to allay fears of job losses and bank closures amidst nationwide protests by employees of banks, including the RBI, saying that the there was no government move to privatise public sector banks either through the "back-door or front-door".

Chidambaram's assurances came even as a one-day strike in protest against outsourcing functions of state-run banks disrupted banking operations across the country,

Three major banking sector unions — All India Bank Employees Association (AIBEA), All India Bank Officers Association (AIBOA) and Bank Employees Federation of India (BEFI) — joined the stir in protest against the Reserve Bank of India's decision to outsource banking activities to private parties. However, employees of two major public sector banks — the State Bank of India and Bank of Baroda — did not participate in the strike as the striking unions had no representation in these banks.

The unions demanded changes in the amendments to the Banking Regulation Act, Clause 12.2, which removed the cap on voting rights even as the RBI approved 74-per cent foreign direct investment in private sector banks in the country. They also called for wider options in the pension scheme to bank employees.

Responding to a calling attention motion in the Lok Sabha, Chidambaram said the RBI had only issued guidelines on outsourcing and that should not be construed as directives for privatisation.

"These are only draft guidelines... It is premature to come to any conclusion", he said.

Chidambaram said the RBI would take into consideration "all upsides and downsides" before finalising the guidelines and wanted employees and the political parties backing the unions to have greater faith in the banking sector regulator. RBI, he said, was doing a good job and its policies had helped to strengthen the country's banking system and bring down the non-performing assets of banks.

While the government was committed to use of innovative methods for financial inclusion and outreach, he said there was no basis of fears that corporates would usurp banking jobs in the garb of outsourcing. Public sector banks had opened 1,026 branches even in 2005-06, he pointed out.

"A matter cannot be frozen in a point of time. We must pursue innovative, forward looking and progressive measures", he said.