The Karnataka State Co-operative Urban Banks Federation (KSCUBF) has approached the Reserve Bank of India (RBI) seeking clarification on whether the newly introduced 10-year tenure cap for directors under the RBI (Urban Co-operative Banks – Governance) Amendment Directions, 2026 applies to professional directors co-opted on the boards of urban cooperative banks.
In a letter addressed to the Chief General Manager-in-Charge, Department of Supervision, RBI, the Federation said that while it welcomes the central bank’s efforts to strengthen governance standards in urban cooperative banks (UCBs), member banks require clarity on certain operational aspects of the amended framework.
The RBI’s amended directions, issued on May 25, 2026, prescribe a maximum continuous tenure of 10 years for directors, followed by a mandatory three-year cooling-off period.
KSCUBF has sought clarification on whether the tenure restriction applies to the position of Chairman, who is elected from among the members of the Board of Directors and presides over board meetings. The Federation has also asked whether service as Chairman should be treated as a distinct tenure or be counted as part of the overall tenure served as a director.
The Federation has further requested guidance on whether any age ceiling or retirement age exists for Chairmen of UCBs under the current governance framework, particularly if the 10-year tenure restriction is not applicable to the post.
Another key issue raised relates to the calculation of continuous service. KSCUBF noted that several individuals have served as ordinary directors for a period and subsequently as Chairmen.
It has sought RBI’s clarification on whether the tenure clock resets when a director becomes Chairman or whether the total time spent on the board, irrespective of designation, should be aggregated for the purpose of the 10-year limit.
The Federation has also sought clarity on the applicability of the tenure restrictions to professional directors co-opted on UCB boards. It pointed out that such directors are not counted towards quorum requirements and do not have voting rights in the election of office-bearers, and therefore sought guidance on whether the new tenure cap applies to them.
KSCUBF said clear regulatory guidance on these issues would help urban cooperative banks ensure compliance with the amended governance norms and avoid inadvertent violations of the new framework.
