RBI moots 3-year cooling-off period for co-op bank directors' reappointment
This story was originally published at 19:01 IST on 8 January 2026
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--RBI seeks comments on draft rural cooperative bks governance norm by Jan 30
--RBI seeks comments on draft urban cooperative bks governance norm by Jan 30
NEW DELHI – The Reserve Bank of India issued draft directions Thursday on the governance of rural and urban cooperative banks and sought feedback on them by Jan. 30. According to the draft norms, a director on the board of a state or central cooperative bank who completes a continuous tenure of 10 years in office will only be eligible for reappointment as a director on the board of the same bank after a minimum cooling-off period of three years.
The Banking Regulation Act, 1949, which empowers the RBI to regulate and supervise all banking companies, stipulates a maximum continuous tenure of 10 years for directors of cooperative banks. "Reserve Bank of India has observed instances where this requirement was sought to be bypassed through brief resignations or brief interruptions between two directorships followed by re-election or co-option to the Board of Directors," the RBI said. "Such practices undermine the intent and spirit of the law. To ensure compliance with the aforesaid statutory provision in letter and spirit, it has been decided to introduce a minimum cooling-off period for directors of co-operative banks."
Under the draft norms, such directors cannot be associated with the cooperative bank in any capacity other than as a member and customer, in the cooling-off period. However, this would not preclude him or her from being appointed as a director on the board of another bank, the central bank said. End
Reported by Pratiksha
Edited by Rajeev Pai
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