By Mr. Abhay Ray 
Introduction
The Union Finance Ministry has indicated that the proposed policy for a 5-day banking week will not be implemented in FY26 (2025-26), citing concerns over potential disruptions to banking operations. News reports suggest that while discussions with the Indian Banking Association (IBA) continue, the initiative is unlikely to be implemented this year.
Banking Sector’s Struggles and Unions’ Demands
This decision comes amid current challenges within the banking sector, such as difficulties in acquiring and retaining deposits. The banking industry continues to rely on physical presence, including door-to-door campaigns, to maintain growth.
In December 2023, a memorandum of understanding was signed between the unions and the IBA, calling for Saturdays to be made a holiday under the Negotiable Instruments Act. The IBA recommended this change to the government, which is now awaiting approval from the Reserve Bank of India (RBI) and the Centre.
In March 2024, the All India Bank Officers’ Confederation (AIBOC) raised concerns, urging the IBA to implement this policy. Furthermore, unions representing bank employees have long advocated for the 5-day work week.
Workforce Shifts in the Banking Industry
The demand for a 5-day work week coincides with the ongoing shift in staffing patterns in the banking sector. Over the past decade, public sector banks (PSBs) have drastically reduced their workforce. Official data shows that the number of clerks in PSBs has fallen from 398,801 in 2013 to 246,965 in 2024, a reduction of 151,836 employees. Similarly, the number of sub-staff members has dropped from 153,628 in 2013 to 94,348 in 2024.
In total, PSBs have seen a reduction of 139,811 employees during this period. In contrast, private sector banks have significantly increased their staff numbers. From 229,124 employees in 2013, private sector banks now employ 846,530 individuals in 2024, marking an increase of 617,406 employees.
What does the media report claim about bank branches?
According to Lokmat Times, a regulatory decision by the RBI will restrict banking operations to only five days a week, implying that banks will not operate on Saturdays anymore. The report suggests that from April 2025, banks will follow the same schedule as government offices, where Saturdays and Sundays are designated as holidays.
Has the RBI issued any official notification?
The Reserve Bank of India has not yet formally announced that banks will be switching to a five-day workweek. Working on the first, third, and fifth Saturdays of the month is still part of the current banking work pattern.
However, there have been continuous discussion between RBI and Indian Banking Association (IBA) for a while regarding a 5-day workweek for banks. Banking unions have been arguing for a reduced workweek since it will better balance employees’ professional and personal lives and be in line with global banking norms.
What are current guidelines for banks to remain open?
Apart from national and regional holidays, bank branches are closed on the second and fourth Saturdays of every month. Bank branches remain open on the first, third, and fifth Saturdays of the month. Sundays are non-working days for all banks.
Why the Five-Day Week Proposal Faces Obstacles ?
The five-day banking week proposal faces several significant obstacles. First, it would incur higher operational costs, requiring additional staff or overtime payments. Many banks may struggle to justify these expenses, particularly in an uncertain economic climate.
Regulatory challenges also pose a hurdle, as changes to banking hours require legislative approval and adjustments to labor laws. Additionally, customer demand for extended in-branch hours is declining, with more people turning to digital banking options like mobile apps and ATMs.
Employee resistance is another key issue, as longer hours could lead to concerns about work-life balance and burnout. Finally, advancements in technology allow banks to provide services around the clock without extending physical branch hours, reducing the need for a five-day week. These combined factors make the proposal difficult to implement.
Conclusion
The five-day banking week proposal is unlikely to be implemented in FY26 due to a mix of financial, operational, and practical challenges. The costs of staffing and operational changes would place a strain on banks, especially in an uncertain economic climate. Additionally, regulatory changes would require time and political support, further delaying implementation. With more customers turning to digital banking, the demand for extended branch hours has diminished, reducing the need for a longer workweek. Employee concerns over work-life balance and potential burnout also present significant obstacles. Technological advancements, such as mobile banking and automation, have made extended hours less necessary. For these reasons, the proposal faces considerable resistance, making its adoption in FY26 unlikely.
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