RBI nixes bank plan for additional holidays on alternate Saturdays

The Reserve Bank of India has nixed a plan for additional bank holidays on alternate Saturdays. The banking sector regulator feels that the infrastructure for keeping key deposit related functions need to be strengthened before the banks can down shutters to enjoy a five day week.

Recently the public sector banks, including State Bank of India had decided they will remain shut on alternate Saturdays as part of a deal reached between employee unions and the Indian Banks Association.

While staff matters are usually decided at the level of the banks or at best that of the Indian Banks Association the apex body of bankers, since this involved a change in banking practices a reference was made to the RBI. The RBI has, however, told SBI it would need more time to study the implications before coming to a decision, said a source at the regulator.

The employee unions at the public sector banks have for long been demanding a five day week as part of their wage settlement. After the meeting with the IBA in February this year, an agency report quoted AIBEA general secretary C H Venkatachalam to say; “Our long pending demand of holiday on second and fourth Saturdays for the bank employees have also been reached”.

The wage related deal was sewn up between the bank managements and the workers just before the tabling of the Union Budget this year averting a national strike. There are about a million employees in all scheduled commercial banks in India as per RBI statistics. Of these about 0.75 million are in the public sector banks. The deal between the state run banks and their employees is likely to impact working hours in private and other banks in India too.

Since the new financial year began from April 1, SBI had sent the reference to RBI to clear the new holiday schedule. The bank employees have argued that as the stock markets and clearing houses remain closed over the weekend, it made little sense to keep the banks open on Saturdays. The compromise of the alternate Saturdays as a day off for the banks is meant to gauge the extent of pressure if the banks follow a five day week.

With the RBI not willing to clear it soon the banks face the prospect of losing a bargaining chip with the unions. It approved late the banks will have to make a midyear change in the holiday schedules. (Indian Express)