All the branches located within the limit of a revenue unit (city/town/revenue village) with a population not exceeding 10,000 as per the 1981 census were required to observe the NPBWD. The only exception was a branch office where government transactions are conducted, or which caters to industrial/urban clientle. No other reasons for no-observance was acceptable.

This is the fallout of therecommendations of working group to review the working hours of rural branches of commercial banks constituted during 1980 by the Indian Banks' Association. The association had, inter alia, recommended that the working hours and weekly holidays may be made flexible to suit local conditions. It also suggested that a day in a week be observed as a non-banking working day, on which no public transactions would be handled because the business to be transacted, it felt, in many of the rural branches everyday was on the slow side, and could be easily handled if they remained open for public transactions for only five days a week. These recommendations were considered by the centre and the Reserve Bank and thus came into being the four-and-half days a week banking in rural India since the second half of 1986. In effect, the banking public in rural India have been denied of the facility by as many number of days as there were number of weeks for the last twelve years, even though these were not the holidays declaredunder the Negotiable Instruments Act and notwithstanding the obligations which banks were contracted to meet on these days.

Nobody can say anything against the well-intended objectives with which the policy initiatives were made. The two crucial tests of their success were a substantial increase in the level of recovery and healthy growth of deposits by the branches. As a concept, it is excellent, but there are ifs and buts. The branches provide service to the public only on four-and-half days a week excluding Sundays and holidays under the Negotiable Instruments Act. Now, what about keeping the house upto date by the branch's remaining (non-managerial) staff members. As it is, the staff members do not have full-time work for the six-and-a-half hours on a week day and four hours on a Saturday. It would, therefore, appear there is no daily workload necessitating an additional day in a week for keeping the internal work upto date. The result was that the work expanded with availability of additional time tofit the bill. Today, there are reportedly over 33,000 rural branches exercising the NPBWD. The question is what is the cost of this exercise to the banks and with what benefits to the rural banking public. The views can be mixed and debatable. What is the loss of business to the banks who do this weekly drill, in favour of the banks who do not do this, having been exempted. It would appear that banks who undertake government business have an edge over others. On the other hand, if it is decided in favour of its continuance, the scheme can be reviewed and the continuance justified with the help of the non-contributory statistics supplied by the rural branch managers.

Prima facie, it would appear that the scheme has already outlived its utility and is certainly not cost-effective. Viewed from another angle, it would also appear that it is a policy initiative with a negative approach. Instead of facilitating additional hours of banking service in rural areas, the scheme curtails it to four-and-a-half days aweek and prevents the banks from meeting their obligations of the day, even though may not be holiday under the Negotiable Instruments Act, and more so when it may not be necessary and expedient to carve out a day exclusively to keep the house in order, and also when the branch manager is free to do his managerial duties out of the branch office without shutting the doors. It is, therefore, hoped that the authorities will for a change take a considered view on this scheme. It may not be out of place to suggest that the issue may be left to the discretion of the managements and the board of directors of individual banks.