Bank Holidays: Why are Banks Closed on 2nd and 4th Saturday? Explained

In India, banks follow a structured bank holidays schedule that includes the second and fourth Saturdays of each month, along with Sundays and other designated holidays. This system was implemented on September 1, 2015, following an agreement between the Indian Banks' Association (IBA), the Reserve Bank of India (RBI), and the Government of India. The primary objective was to improve the work-life balance of bank employees and streamline banking operations. 

In this article, we will learn in detail why banks are closed on the 2nd and 4th Saturdays? Discover the history, legal framework, and reasons behind this rule. Also, check the full list of bank holidays in March 2025.

Are Banks Open or Closed Today on March 15, 2025? 

Today, March 15, 2025, is the third Saturday of the month. Under the standard banking schedule, banks operate on first and third Saturdays. However, due to regional observances of festivals such as Holi and Yaosang 2nd Day, banks in certain states, including Agartala (Tripura), Bhubaneswar (Odisha), Imphal (Manipur), and Patna (Bihar), are closed today. In other states, including Uttar Pradesh, banks are open and functioning as per their regular working hours.  

2nd and 4th Saturday Bank Holiday Rule: History 

The Reserve Bank of India (RBI) officially announced this change in a press release dated August 28, 2015, under the Negotiable Instruments Act, 1881. According to the RBI Press Release, all scheduled and non-scheduled commercial banks across India must remain closed on the second and fourth Saturdays of each month while remaining open on the first, third, and fifth Saturdays. 

Before the 2015 reform, banks operated on all Saturdays, with the second and fourth Saturdays being half-days. This often led to confusion among customers regarding banking hours and added to the workload of employees. 

The demand for a better work-life balance for banking staff had been ongoing for years. With technological advancements allowing 24/7 online banking, there was growing pressure to reduce the number of working Saturdays without disrupting banking operations. 

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Institutional Bodies Involved 

The transition to the current Saturday closure system involved collaboration among key institutions: 

Government of India: Issued official notifications declaring the second and fourth Saturdays as public holidays under the Negotiable Instruments Act. 

Reserve Bank of India (RBI): As the central banking authority, the RBI provided guidelines to banks to adjust their operations in line with the new holiday schedule. 

Indian Banks' Association (IBA): Representing various banking institutions, the IBA played a pivotal role in negotiating and facilitating the implementation of the revised holiday structure. 

RBI’s Categorization of Bank Holidays 

The Reserve Bank of India (RBI) is responsible for planning, regulating, and scheduling bank holidays across the country. It categorizes holidays into three main types: The Reserve Bank of India classifies bank holidays into three main categories: 

Holidays Under the Negotiable Instruments Act, 1881: These are public holidays declared by the government, during which banks remain closed for general banking transactions, including cheque clearing and financial settlements. Examples include national holidays like Republic Day (January 26), Independence Day (August 15), and Gandhi Jayanti (October 2), as well as major religious festivals.  

Real-Time Gross Settlement (RTGS) Holidays: RTGS, used for high-value fund transfers, follows a specific holiday schedule. On RTGS holidays, typically national holidays and RBI-specified non-working days, RTGS transactions are unavailable. However, other digital payment systems like NEFT (National Electronic Funds Transfer) and UPI (Unified Payments Interface) remain operational. 

Banks’ Annual Closing of Accounts: On April 1 each year, banks close for public transactions to reconcile their financial records for the new fiscal year. While branches are closed to customers, internal administrative work continues. 

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Banking Services Available on Holidays 

Despite physical branches being closed on designated holidays, several banking services remain accessible: 

Online Banking: Customers can perform various transactions such as fund transfers, bill payments, and account management through internet banking platforms. 

Mobile Banking: Banking apps allow customers to access services, check balances, and make transactions using their smartphones. 

ATMs: Automated Teller Machines are operational 24/7, enabling cash withdrawals, deposits, and balance inquiries. 

Digital Payment Systems: Services like UPI, IMPS (Immediate Payment Service), and NEFT facilitate real-time transactions even on holidays.

Bank Holidays in March 2025: Check the Full List 

Apart from the second and fourth Saturday holidays, banks in India remain closed on certain regional and national holidays declared by the Reserve Bank of India (RBI) and state governments. These holidays vary across states based on local festivals and observances.

Here’s the complete list of bank holidays in March 2025: 

Source: Reserve Bank of India (RBI)

Conclusion 

The second and fourth Saturday bank holidays were introduced to enhance employee well-being while ensuring smooth banking operations. This decision, backed by the Negotiable Instruments Act, 1881, was a result of discussions between the IBA, RBI, and the Government of India. 

With digital banking solutions available 24/7, customers can manage their finances seamlessly, even on non-working days. However, those needing physical banking services should plan their visits accordingly to avoid inconvenience.

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