Five-Day Workweek For Banks? Not Likely Anytime Soon

The much-discussed proposal for a five-day workweek in the banking sector may not come into effect in the 2025-26 financial year, according to the recent signals from the government.

Although discussions have been ongoing for several years, the Finance Ministry recently indicated that the transition to a shorter workweek is unlikely to happen this year, sources told Business Standard.

The Indian Bank Association (IBA) and bank unions have been pushing for the change as discussions were progressing over the past few years.

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The IBA and the United Forum of Bank Unions (UFBU), which represents banking employees, signed a joint note in March 2024 outlining the shift to a five-day week, with both Saturdays and Sundays off.

However, the final decision rests with the government and the Reserve Bank of India (RBI), which regulates banking hours.

It was said that the transition to a five-day banking week could disrupt services, particularly on Saturdays, a day many customers prefer for completing their banking tasks.

Despite the growing trend of digital banking, many customers still rely on physical branch visits, especially on Saturdays, making it a crucial day for banking transactions.

The Finance Ministry expressed concerns that closing banks on Saturdays might create delays and inconvenience for customers.

With banks already facing challenges in attracting and retaining deposits, officials believe that reducing banking hours further could exacerbate the situation.

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While digital banking services have become more popular, physical branches remain essential for customer interactions, marketing efforts, and activities like door-to-door campaigns. For this reason, banks are hesitant to close on Saturdays, a day when many of these efforts take place.

Bank unions have not given up on the idea, continuing to push for a five-day week. In March 2024, the UFBU sent a letter to Finance Minister Nirmala Sitharaman, emphasising that a five-day workweek would not affect total working hours or customer service.

Instead, it proposes to extend working hours on the remaining weekdays to ensure no disruption in services.

 In December 2023, the UFBU and the IBA signed a memorandum recommending that Saturdays be made official holidays under the Negotiable Instruments Act. However, this proposal is awaiting approval from the RBI.

The push for fewer working days comes at a time when the public sector banking workforce has seen a major reduction. The number of clerks has dropped from 3.98 lakh in 2013 to 2.46 lakh in 2024, a loss of nearly 1.5 lakh employees. Sub-staff positions have also seen a sharp decline, from 1.53 lakh in 2013 to just over 94,000 in 2024. Meanwhile, private sector banks have significantly increased their workforce, as per reports.

The issue of a five-day workweek has also sparked strikes and protests. On March 24-25, 2024, the UFBU had planned a 48-hour strike demanding a shorter workweek and better staffing levels.

However, the strike was called off after the Central Labour Commission assured that discussions were moving in the right direction.