‘Jan 22 not a state function’: Unscheduled holiday declaration irks banking unions and market players

Stock markets were open for trading on Saturday without the planned disaster recovery movements. However, the markets will remain shut on Monday as the Maharashtra government has declared public holiday under the Negotiable instruments Act.

In a statement, the Kolkata-based Bank Employees Federation of India (BEFI), one of the nine bank unions, expressed concern over the notification issued on January 18 by the Department of Financial Services (DFS), Ministry of Finance, declaring Half-day closing of public sector banks (PSB), PSU insurance companies, financial institutions and regional rural banks (RRB) on January 22.

“The occasion of Ram Lalla Pran Pratishtha scheduled to be held on January 22 is only a religious function and not a state function. The Preamble to the Constitution declares India to be a Sovereign Socialist Secular Democratic Republic,” BEFI said, urging the government to maintain the direction of the Constitution in letter and spirit. “BEFI strongly opposes this highly objectionable Notification issued by the DFS and demands immediate withdrawal of the order,” it said.

In an order dated January 18, the DFS said, “the Department of Personnel and Training (DoPT) order in respect of central institutions and central industrial establishments shall also apply to all PSU banks, insurance companies, PSU financial institutions and RRBs to enable employees to participate in the Ram Lalla Pran Pratishtha celebrations.”

“To enable employees to participate in the celebrations, it has been decided that all Central government offices, central institutions and central industrial establishments throughout India will be closed for half day till 2.30 pm on January 22,” DoPT said in an office memorandum.

According to S C Garg, former finance secretary, the holidays are of two types – one is the holiday where the offices are closed, and the second is the holiday where all the establishments are supposed to be closed. “I understand this notification has been issued with the requirement of closing all establishments, factories and others. So, this covers the RBI, which is also an establishment. If the Maharashtra government has declared a holiday (on January 22), which is applicable to all the establishments, then this has to be done,” said Garg, also a former director on the RBI’s Central Board of Directors.

Queries sent to the Ministry of Finance by The Indian Express on the issuance of the directive for half-day closing to banks and financial institutions by the DFS remained unanswered.

“This is not the first occasion of this nature. The Viksit Bharat Sankalp Yatra (VBSY) flagged off by the Prime Minister of the country on November 15, 2023 and scheduled to continue till 26th of this month has also been undertaken to campaign for the ruling dispensation throughout the country by engaging government and bank personnel including its resources,” BEFI said.

According to the RBI, the three-day Variable Rate Repo (VRR) auction conducted today with date of reversal on January 22 will now be reversed on January 23. The three-day VRR auction announced earlier cancelled. Instead, a 2-day VRR auction will now be conducted on January 23.

The BSE Sensex closed 0.36 per cent, or 260 points, down at 71,423.65 and the NSE Nifty fell 51 points at 21,571.80 on Saturday.

In another rare instance, the RBI had announced a trading holiday on February 7, 2022, after the Maharashtra government had declared the day as a public holiday under Section 25 of the Negotiable Instruments Act, 1881. The state government had declared a public holiday to mourn the death of legendary singer Lata Mangeshkar, who passed away on February 6, 2022. Even the stock exchanges had declared a trading holiday on February 7.

The RBI did not respond to queries sent on the issue.