In the Vedic period, on a 'Shravan Poornima' day (Full Moon Day of the Hindu month of Shravan), the deities and demons were fighting a battle against each other. Unfortunately the demons were in a stronger position, as compared to the deities. The king of the deities, Lord Indra, was very much worried about the result of the battle. His wife Indrani (also known as Shashikala) could not see him worried and prayed to the almighty to help her husband. Indrani was a religious lady, so she prepared a talisman with her religious power and tied it around Indra's right wrist.
Indrani believed that her talisman will safeguard Indra from the attack of demons. Eventually, she proved right, as that day, the deities won the battle and Lord Indra escaped unhurt. As the talisman had the power of protecting the person who wore it, it came to be known as 'Raksha Sutra' and the ceremony of tying it was called 'Raksha Bandhan'. Since this particular act of tying the talisman took place on 'Shravan Poornima' day, it has become a tradition to celebrate 'Raksha Bandhan' on the 'Shravan Poornima' day every year. With time, the festival came to comprise of brother-sister duo, rather than husband-wife.
In the Western Region, the festival is known as Nariyal Purnima and as a ritual coconuts are thrown into the sea on this day. The festival marks the beginning of the fishing season.
In South India, this festival is called Avani Avittam. It is an important day for the Brahmins where they first take a holy bath and then change their holy thread (Janeyu) chanting the mantras. They take a vow to perform their duties as prescribed in the holy books and adopt a good conduct and dignity.
In North India, Rakhi Purnima is also called Kajri Purnima or Kajri Navami, when wheat or barley is sown. Goddess Bhagwati is worshiped and farmers seek her blessings for a good crop.
The great Nobel Laureate Rabindranath Tagore initiated the 'Rakhi Utsava' (Rakhi tying ceremony) in Shanti Niketan to maintain universal brotherhood long back in 1905 at the time of Bengal Partition. But the custom is continued till date by the students of the Shanti-Niketan.
After the ritual of tying Rakhi is over, the brothers would give their sisters some gift or money and promise them to help them whenever they need and protect them throughout their lifetime. In fact, offering gifts to sisters is a tradition of Raksha Bandhan. Year by year, the enthusiasm amongst the brothers and their sisters, to celebrate the festival, is increasing. It is clearly visible from the wide variety of Rakhi, Raksha Bandhan gifts and sweets flocking the shelves of the stores, during the holiday. The festival bears social significance, because it symbolizes the importance of relationship between siblings.