The eagerly awaited transition to 5 days banking in government banks appears to be on the horizon. Following a recent meeting between the Indian Banks Association (IBA) and the United Forum of Bank Unions (UFBU), the IBA has granted approval for this transformation. The proposal has now been forwarded to the Finance Ministry for its ultimate endorsement. Here’s what you need to know about this significant development.
A LONG-STANDING DEMAND
The call for a 5 days workweek has been a long-standing demand from bank employees, initially proposed in 2015.
This proposal for 5 days banking found its place in the charter of demands presented during the 10th Bipartite Settlement.
Historically, public sector banks were operational for 6 days a week. However, in 2015, a momentous change took place with banks being granted a weekly off on the second and fourth Saturday, effective from September 1, 2015.
According to a press release by the Reserve Bank of India on August 28, 2015, “the Government of India issued a Notification on August 20, 2015, declaring every second and the fourth Saturday of every month as a public holiday.”
This move was in line with Section 25 of the Negotiable Instruments Act, 1881. This meant that all banks, regardless of their inclusion in the Second Schedule to the Reserve Bank of India Act, 1934, were to observe holidays on the second and fourth Saturdays.
THE PENDING TRANSITION
The Indian Banks Association had previously agreed to the demand for 5 days banking in March 2023. However, the proposal from the IBA to the Ministry of Finance had not been submitted for approval.
According to the latest media reports, the IBA has now sent its proposal to the Ministry of Finance. Once the Ministry of Finance approves the transition to 5 days banking, it will be executed across government banks.
In recent circulars, the IBA has stated that the move to 5 days banking is under serious consideration, and the final status will be communicated shortly.
RESERVE BANK OF INDIA’S ROLE
The Ministry of Finance is set to discuss the shift to 5 days banking with the Reserve Bank of India (RBI), the primary regulator of the banking system in India.
The regular interventions by RBI Governor Shaktikant Das and Finance Minister Nirmala Sitharaman have aimed to promote digitization in public sector banks and regional rural banks.
This transformation from physical to digital modes of banking is evident in the robust net banking systems of banks and the growing adoption of UPI for seamless transactions, facilitating banking from remote locations.
This paradigm shift towards digitization aligns well with the move to 5 days banking and is expected to play a pivotal role in its favor.
SUPPORT FROM SUSHIL KUMAR MODI
In a recent development, BJP member and parliamentary panel member Sushil Kumar Modi expressed support for the demand for 5 days banking.
He articulated that the demand was indeed genuine, drawing parallels with several state and central services that already operate on a 5-day workweek.
He further suggested increasing working hours by half an hour from Monday to Friday and urged the government to consider implementing this change promptly.
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CONCLUSION 5 DAYS BANKING
The transition to 5 days banking in government banks is poised to bring significant changes to the banking landscape.
With the demand for greater work-life balance and the embrace of digital transformation, the move is expected to be well-received by bank employees and customers alike. However, the implementation date is still under review, and further updates are eagerly awaited.