A major highlight of the ongoing National Convention of Urban Cooperative Banks (UCBs) in Jaipur was Sahakar Bharati President Uday Joshi’s clarification on the long-debated issue of director tenure in cooperative banks.
Addressing delegates from 17 states, Joshi explained that the Banking Laws (Amendment) Act, 2025, notified by the Central Government and effective from August 1, 2025, has extended the maximum continuous tenure of cooperative bank directors (excluding chairpersons and whole-time directors) from eight years to ten years.
He emphasized that directors who have already completed 10 years in office – whether before or after August 1, 2025 – will not be eligible to contest the next election immediately. Instead, they will have to undergo a cooling-off period of five years or one full term, after which they may once again seek election.
“This interpretation brings much-needed clarity, as many directors had assumed that the 10-year tenure would start being counted only from August 1, 2025, and that they would remain eligible beyond this period. That is not the case. The law clearly states that once a director has completed 10 years, whether before or after August 1, 2025, they must step aside for one full term before becoming eligible again,” Joshi explained.
He underlined that the rule strikes a balance between rotation of leadership and continuity of experience, while preventing entrenched leadership in cooperative banks.
Delegates welcomed the clarification, calling it a “balanced approach” that promotes transparency, governance, and stability while allowing seasoned leaders to return after a gap.
The issue of tenure, which has long created confusion among banks, election authorities, and candidates, is expected to remain a key theme in the convention’s deliberations on reforms and the future roadmap for UCBs.
