Sept 28-30 bank strike: Is govt inertia on 5-day week boiling over?

As India braces for a crippling three-day nationwide bank strike from September 28 to September 30, authorities have scrambled to mitigate the fallout, with the government and the Reserve Bank of India ordering branches to stay open on Sunday, September 27.

Yet, treating this weekend patch as a mere logistical fix misses the forest for the trees.

Behind the looming walkout lies a much deeper systemic friction that demands an urgent re-examination: why has a five-day work week — agreed in principle between the Indian Banks’ Association (IBA) and employee unions back in December 2023, and formally codified in a settlement text in March 2024 — remained trapped in bureaucratic limbo for over two and a half years?

Long-pending demand

While the Central government, state governments, the RBI, NABARD, and public sector insurance giants like LIC have operated smoothly on a five-day week for decades, with the Central government transitioning as far back as 1985, bank employees are still forced to fight for the same standard.

The current strike is not a sudden, capricious outburst; it is the boiling point of prolonged administrative inertia. With the government keeping the formal approval indefinitely "under consideration" without a clear timeline or transparent communication of concerns, it has fostered avoidable industrial tension, turning a resolved negotiation table into a protracted standoff.

The RBI is understood to have transitioned to a 5-day work week shortly after the Central government's landmark 1985 shift. It aligned its operations with international financial institutions and regulatory standards to maintain a standard Monday-to-Friday timeline.

Where it all began

Since then, there has been a continuous demand by bank employees to adopt the 5-day working system with a suitable increase of working hours on those five days. But the IBA resisted the attempt.

Then there was an agreement to have bank holidays on the second and fourth Saturdays with a corresponding increase of working hours on the other days.

Also Read: Banks to remain open on Sunday, September 27 in view of proposed strike

Finally, the 5-day work week for public sector banks in India was agreed in principle under a joint understanding between the IBA and bank unions on December 7, 2023, and recorded alongside the signing of the 12th Bipartite Settlement and 9th Joint Note on March 8, 2024.

However, unlike core wage scales, the five-day work week was not formally embedded as an operative, active statute inside the main binding text of the March 8, 2024 settlement because its enforcement is contingent upon official government and regulatory clearances.

IBA’s proposal to govt

The IBA proposed the following to the government:

A) All Saturdays are to be declared as closed holidays for the banking industry (replacing the current system where only the 2nd and 4th Saturdays are holidays).

B) To offset the lost working hours from declaring all Saturdays off, daily working hours for bank employees and officers are agreed to be increased by 30 to 40 minutes on regular working weekdays (Monday through Friday).

While the IBA and bank unions signed off on the proposal in March 2024, the Department of Financial Services (DFS) under the Union Ministry of Finance has kept the decision under "active consideration" due to several key factors.

The Finance Ministry told Parliament in December 2023 that the IBA has proposed to declare all Saturdays as banking holidays. Subsequently, the IBA and bank employee unions reached an understanding that was incorporated into a bipartite settlement/joint note signed on March 8, 2024. The arrangement envisaged Saturdays as weekly holidays, accompanied by changes in working hours to compensate for the reduction in working days.

Implementation, however, required Government approval and the necessary clearances from the RBI.

Pending government approval

The demand is no longer merely a proposal submitted by employee unions or the IBA. It is an understanding incorporated into a subsequent industry-level settlement, for which the required government approval remains pending.

Also Read: Bank unions call September 11 strike over five-day banking, PLI, pension demands

The government may have legitimate concerns about banking operations, customer convenience, and business requirements. However, the relevant question is whether these concerns have been formally communicated, examined within a definite time frame, and resolved through a clear decision.

The prolonged delay raises questions about the implementation of an understanding reached between the banking industry and employee representatives. It appears fair that bank employees want clarity on when the five-day work week will be implemented, particularly when the settlement has already been signed.

The issue, therefore, is not simply whether five-day banking is desirable, but why an agreed arrangement requiring government approval has remained unresolved for such an extended period, and whether a time-bound decision can be taken.

Strike disruptions

Employees will be losing their wages for the days of strike. As many banking operations are now done through alternate channels like ATMs and electronic funds transfers, customers' visits to bank branches have come down drastically. This has led to less disruption of service due to any strike by employees.

Also Read: Bank unions threaten nationwide strike on Jan 27 over 5-day work week demand

Under standard settlement provisions, employees who work on a declared holiday are typically eligible for 200 per cent of their wages — though it is not yet officially confirmed whether this rate applies to Sunday, September 27, specifically.

While providing its sanction for keeping the banks open that day, the RBI stated, "The banks may be advised to ensure adherence to relevant legal requirements in this regard" — a line that, if the usual settlement provisions hold, would mean employees are entitled to double pay for the day. Officers are also paid a daily allowance and out-of-pocket expenses on a similar basis.

What a strange situation this is: striking for a day costs an employee a full day's wages, while working the very Sunday arranged to soften the strike's impact earns them double pay — two days' wages for one day's work.

Ball in govt’s court

Banks working this Sunday may help reduce the immediate inconvenience caused by the three-day strike, but it does not address the underlying issue. If the government believes that further consultation is necessary, it should set out clearly what issues remain unresolved and provide a definite timeline for a decision.

Keeping an agreed arrangement indefinitely under consideration only prolongs uncertainty and industrial tension.