State Bank of India, the nation's largest lender, said its more than 9,000 branches opened for business Monday after the government brokered an end to a weeklong strike.

The bank's 205,000 workers returned to work after the bank agreed to a pension-payment arrangement that was announced by Finance Minister P. Chidambaram in New Delhi late Sunday.

"All employees will report for work today, and we expect normalcy will be restored within a couple of days," said Umesh Naik, president of the All India State Bank of India Staff Federation. "We all will sit back late to clear backlog from the last week."


The end of the strike, which started April 3, means thousands of companies and State Bank's more than 100 million individual customers can again get banking services. The strike had also disrupted trade in India's foreign-currency, money and debt markets, where the 200-year-old bank is the largest participant.

"The end of the strike will provide some comfort and positive sentiment to the stock," said K.K. Mittal, a fund manager at Escorts Asset Management in New Delhi.

Under the agreement, employees who drew as much as 21,040 rupees, or $471, as their last monthly salary will receive half the amount as a monthly pension, Chidambaram said. Those with higher salaries will receive 40 percent. Workers earlier received a monthly pension of 4,250 rupees.

"We are yet to work out the details of loss or the impact on the bank of higher pensions," Abhijit Dutta, a deputy managing director at State Bank, said in Mumbai. "All branches will be open today and we will ensure normalcy is restored."

The stock, which had risen 6.8 percent over the past six months, traded 1.4 percent lower at 965 rupees on the Mumbai stock exchange, amid lingering concerns about the effect of the strike and the pension settlement on the bank.

The strike cost the economy and the bank billions of rupees of business, the bank's chairman, A. K. Purwar, said last week. State governments shifted some of their business to other lenders, he said.

"The strike hasn't made much of a difference to the treasury markets, as volumes have dropped steadily over the past few months because of other factors," said V. Ravi Kumar, senior director for treasury at Infrastructure Development Finance in Mumbai.

The value of bonds traded in February dropped to 1.82 trillion rupees , from 2.12 trillion rupees in November, according to data compiled by Bloomberg. The volume of bonds traded dropped as surplus funds in the banking system began to diminish in December.

The strike also caused delays in some payments on State Bank bonds, according to Crisil, a subsidiary of Standard & Poor's. The credit assessor retained its AAA rating on the bank's local-currency debt, saying the delay did not reflect any financial inability or unwillingness by the bank to pay.

The bank is rated Baa2 by Moody's Investors Service. That is one level higher than India's sovereign rating of Baa3, the lowest investment grade.