The National Federation of Urban Co-operative Banks and Credit Societies Ltd. (NAFCUB), led by its President Laxmi Das, has raised concerns over the implementation of amended provisions of the Banking Regulation Act relating to the tenure of directors in Urban Cooperative Banks (UCBs).
During a meeting at Atal Akshay Urja Bhawan with Anand Kumar Jha, Das highlighted that the amended provisions, notified through a Gazette notification on August 1, 2025 after being passed by both Houses of Parliament, should be implemented prospectively and not retrospectively.
He emphasised that boards of directors of Urban Cooperative Banks elected prior to August 1, 2025, must be allowed to complete their full elected tenure without disruption. He also expressed concern that Reserve Bank of India officials, during inspections, are reportedly insisting on immediate compliance with the amended provisions of the Banking Regulation Act, including directions for directors to vacate positions after completing ten years in office, even where boards were elected before the notification date.
According to Das, NAFCUB fears such an interpretation could create administrative uncertainty and instability within the cooperative banking sector, particularly for Urban Cooperative Banks operating under valid existing mandates.
He urged the Office of the Central Registrar of Cooperative Societies (CRCS) to intervene and issue a formal communication to the Reserve Bank of India seeking clarity on the matter, requesting that boards elected before August 1, 2025 be permitted to complete their original term.
Das also raised concerns regarding the Multi-State Cooperative Societies Act Amendment 2023, particularly provisions related to the appointment of administrators. He stated that under the earlier framework, administrators could not be appointed solely due to delays in elections to multi-state cooperative societies, whereas the amended provisions now allow such appointments, which he described as detrimental to the autonomy and democratic functioning of cooperatives.
The discussions underline growing apprehensions within the cooperative banking sector regarding regulatory interpretation and its impact on governance continuity.
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