The second day is Amavasya when Lakshmi puja is performed. It is believed that on this day Goddess Lakshmi would be in her benevolent mood and fulfill the wishes of her devotees. One version says that it was on this day that Goddess Lakshmi emerged from Kshira Sagara (Ocean of Milk) when the Gods and demons were churning the sagara (ocean) for nectar (Amrit)
The other version is that when Lord Vishnu in the guise of Vamana, sought three feet of land from the generous demon king Bali, the latter had to surrender his head as Vamana had conquered the earth and the sky in two strides. Lord Vishnu banishes Bali into the Pathala Loka (netherland) by keeping his third stride on Bali's head. Later, pleased by his generosity, Lord Vishnu grants him a boon and he in turn requests the Lord to guard his palace at Pathala Loka.
Meanwhile, the Goddess is unable to bear the separation and her grief affects the functioning of the entire universe. Brahma and Lord Shiva offer themselves as guards and plead with Bali to relieve Vishnu. So, on the Amavasya day, Lord Vishnu returns to his abode and Goddess Lakshmi is delighted. It is believed that those who worship Goddess Lakshmi on this day would be bestowed with all the riches.
The third day is "Kartika Shudda Padyami." On this day Bali would come out of Pathala Loka and rule Bhuloka as per the boon given by Lord Vishnu. Hence, it is also known as "Bali Padyami".
The fourth day is referred to as "Yama Dvitiya." On this day, sisters invite their brothers to their homes.
However, in the northern part of India it is celebrated as the return of Ram along with Sita and Lakshman from his 14 years of exile after killing Ravana. To commemorate his return to Ayodhya, his subjects illuminated the kingdom and burst crackers. For the Gujaratis, Marwaris and other business community Diwali marks the worship of Goddess Lakshmi and also the beginning of the new financial year.