Officials said the Banking Regulation Act became applicable to cooperative banks in 2021 and was amended again in 2025. Under the amended provisions, persons who had completed 10 years as directors as of August 1, 2025, could not continue in office.
Mumbai: The Reserve Bank of India (RBI) has removed Maharashtra Cooperation Minister Babasaheb Patil from the board of the Latur District Central Cooperative Bank for allegedly violating rules governing the tenure of cooperative bank directors.
The action followed a complaint by bank member Satish Jadhav, who alleged that eight of the bank’s 19 directors had completed more than 10 years in office and were therefore ineligible to continue. Mr. Jadhav later approached the Aurangabad bench of the Bombay High Court, which directed the authorities on August 3 to decide the matter within six weeks.
Seven of the eight directors subsequently resigned, while Mr. Patil continued in office. RBI Assistant General Manager Kapil Goswami issued the order removing him on Friday.
Mr. Patil has termed the RBI action “wrong and improper” and said he plans to challenge it before the High Court.
Under the Banking Regulation Act, 1949, as amended by the Banking Laws (Amendment) Act, 2025, directors of District Central Cooperative Banks (DCCBs), or Central Cooperative Banks, are subject to a maximum tenure of 10 years.
Officials said the Banking Regulation Act became applicable to cooperative banks in 2021 and was amended again in 2025. Under the amended provisions, persons who had completed 10 years as directors as of August 1, 2025, could not continue in office.
However, officials said it was unclear whether the provision would apply retrospectively or prospectively.
Earlier, State Cooperation Department Deputy Secretary Sudhir Amrite had written to the Cooperation Commissioner, Pune, seeking action against directors of DCCBs who had completed more than 10 years in office.
According to officials, Mr. Jadhav complained to the RBI Chief General Manager seeking the disqualification of eight directors of the Latur bank for alleged non-compliance with the amended law. Copies of the complaint were also submitted to the Divisional Joint Registrar of Cooperative Societies, Latur Division, the Cooperation Commissioner and the NABARD section of the RBI, he said.
After the RBI did not act on his complaint, Mr. Jadhav approached the Bombay High Court on June 21. On August 3, the court directed the RBI to decide his May 25 complaint within six weeks.
Mr. Patil, a senior NCP leader, said the RBI had introduced the 10-year tenure limit for cooperative bank directors in 2021, but the Maharashtra government had not amended its cooperative laws accordingly. He argued that the provision was therefore not applicable in the State.
“I have written to the RBI asking under which rule I have been removed as a director,” he said.
Mr. Patil also questioned the applicability of the tenure provision to his own term. “If the rule was introduced in 2021, a director completing a 10-year tenure would do so only in 2031. I have completed only three years under the rule, and seven more years would be completed in 2031,” he said.
