5-day week, 17 percent pay hike for bank staff likely before Lok Sabha poll code

HYDERABAD: Bank employees may soon enjoy a five-day work week, as the Central Government is considering granting approval for the same before the implementation of the Model Code of Conduct (MCC) ahead of Lok Sabha elections.

Following the signing of a Memorandum of Understanding (MoU) between the Indian Banks’ Association (IBA) and bank unions in December 2024, public-sector bank employees are poised to receive a 17 per cent salary increase.

Unions have been advocating for the implementation of a five-day work week, akin to Government offices, the RBI, and the Life Insurance Corporation of India, within 180 days. The proposal, approved by both IBA and employee unions in November, has been forwarded to the Finance Ministry for consideration.

According to reports, Government officials have expressed support for the proposal and indicated that the time for announcing the five-day week may be imminent. Currently, public sector and private sector banks operate on the first and third Saturdays of the month.

However, if the proposed changes are approved, all Saturdays would be designated as holidays under Section 25 of the Negotiable Instruments Act.

In 2015, the Government issued a notification declaring every second and fourth Saturday of every month as public holidays under Section 25 of the Negotiable Instruments Act of 1881. This led to the observation of public holidays on the second and fourth Saturdays by all scheduled and non-scheduled banks.

Presently, there are 1.54 million employees in the banking sector, including public and private sectors, payment banks, and small finance banks, with approximately 95,000 employees in Regional Rural Banks.