In a significant development, Karnataka-based SUCO Souharda Sahakari Bank Chairman Mohit Maski has written a letter to the Secretary, Department of Cooperation, Government of Karnataka, expressing serious concern over the Banking Regulation (Amendment) Act, 2025, which restricts the tenure of directors of cooperative banks to a maximum of ten consecutive years.
Maski, in his detailed representation, termed the amendment an “unconstitutional encroachment” on the State’s exclusive legislative powers over cooperative societies, as guaranteed under Entry 32 of List II (State List) in the Seventh Schedule to the Constitution of India. The amendment, notified in August 2025, has drawn criticism from several cooperative institutions for undermining State autonomy.
Referring to the Supreme Court’s landmark judgment of July 2021 (delivered by Justice R.F. Nariman and Justice B.R. Gavai) on the Constitution (97th Amendment) Act, 2011, Maski pointed out that the incorporation, regulation, and winding up of cooperative societies fall solely within the jurisdiction of State Legislatures. He emphasized that the Union Government cannot indirectly legislate on subjects that are constitutionally reserved for the States.
While the amendment has been framed under the Banking Regulation Act, Maski argued that its substance directly interferes with the governance and internal management of cooperative banks registered under State laws, such as the Karnataka Cooperative Societies Act, 1959 and the Karnataka Souharda Sahakari Act, 1997. He stated that board composition and tenure are matters that fall “squarely within the State’s exclusive domain.”
Highlighting the State’s cooperative framework, Maski noted that under Karnataka’s cooperative laws, the General Body of each society holds the final authority to elect its Board and determine governance norms. The Central amendment, he said, undermines these provisions and weakens the democratic control of members, thereby striking at the foundation of cooperative autonomy.
Maski urged the Government of Karnataka to take immediate steps to safeguard the State’s constitutional rights.
He requested the State to raise the issue with the Government of India and seek withdrawal of the impugned provisions, explore legal options to challenge the amendment’s constitutional validity before an appropriate judicial forum, and issue interim directions advising cooperative banks to follow the tenure provisions under State laws until the matter is settled.
Concluding his letter, Maski expressed confidence that the Government of Karnataka will act promptly to protect the State’s legislative competence, preserve cooperative autonomy, and uphold the federal balance as envisioned in the Constitution and reaffirmed by the Hon’ble Supreme Court.
