I agree with your idea of rotation, but paying extra on holidays has a little history. Till 1977, all bank employees used to have a concept of overtime. If they work beyond their working hours, they are eligible for extra pay. The over time pay structure was in a graded structure, with low incentive for first hours and progressing gradually reaching 200% of the salary per hour. Same 200% is the case on holidays. Bank employees used to waste their time during the regular working hours and start their real work only after the start of over time. It has become a big menace in the industry. Unions used to blackmail the management with coersive methods like pen down strike, gherao of the managers etc., Luckly in 1977, during emergency this was banned in all the nationalised banks, except SBI. Eventually even SBI it was banned later. So with this history, we should be wise enough, not to suggest any extra pay, instead employ additional people for that work.
Yes, there certainly is the need to keep the holidays being available with the banks to the barest minimum. The reason being that, since they essentially deal with the public and other institutions both, three public holildays in the row put them into too much of inconvenience. Government of the day must give a serious thought to this aspect, it being largely public related. However, as an alternative, the so called employees can be given the holiday in split - form there causing no hardship to the account holders.
Indian calendar is filled with holidays, we are the most under performers in this world, there are so many holidays and every years center or state wants to add more holidays. This is the reason we can never be productive as Japanese or Chinese. We are at the bottom of development ladder and no one is keen to climb the ladder, because of selfish nature of Indian mind set.