The Maharashtra Urban Co-operative Banks Federation (MUCBF) has strongly opposed the two-term and 10-year tenure cap imposed on directors of Urban Co-operative Banks (UCBs), describing the provision as arbitrary, unjustified and harmful to the democratic ethos of the cooperative movement.
The opposition was expressed unanimously at a Special General Body Meeting held in Pune on Saturday, where a resolution was passed to circulate the decision to all member banks for adoption at their respective board meetings.
The meeting was convened to deliberate on key regulatory challenges confronting UCBs and witnessed participation from nearly 400 representatives of 155 Urban Co-operative Banks across Maharashtra, covering Tier-1 to Tier-4 banks.
The meeting was attended by NAFCUB Vice-Chairman Milind Kale, along with Vaishali Awade, Dattaram Chalke, Satish Gupta, Subhash Mohite, and other prominent figures from Maharashtra’s cooperative banking sector.
Speaking to Indian Cooperative, MUCBF Chairman Ajay Barmechha said the strong turnout reflected the depth of concern within the sector and underlined the unity of cooperative banks on issues affecting their autonomy and democratic functioning.
The federation expressed serious concern over amendments made to the Banking Regulation Act in 2020 and 2025, which expanded the direct regulatory oversight of the Reserve Bank of India (RBI) over Urban Co-operative Banks. MUCBF pointed out that earlier, recognising the unique character of cooperatives, only selective provisions of the Act were made applicable to UCBs through Section 56, with the limited objective of regulating banking operations and not the democratic governance of cooperative institutions.
MUCBF further noted that the RBI itself mandates that boards should not interfere in the day-to-day operations of banks, which are handled by qualified and trained professionals. Appointments of Managing Directors and Chief Executive Officers are already subject to RBI approval, ensuring adequate regulatory oversight without undermining the role of elected boards.
The resolution emphasised that directors bring valuable experience from diverse professional backgrounds, contributing to institutional stability, growth and credibility. Imposing rigid tenure limits, the federation warned, could result in the loss of experienced leadership and weaken long-term strategic guidance.
Strong objections were also raised to the Gazette notification dated 10 December 2025, made effective from 15 December 2025, which introduced eligibility and disqualification norms for directors, including educational qualifications. MUCBF termed these provisions discriminatory, noting that such criteria are not applicable to any elected representatives in India, including Members of Parliament who frame national legislation.
The federation cautioned that these regulatory measures dilute the autonomy granted to cooperatives under the 97th Constitutional Amendment and infringe upon fundamental rights guaranteed under the Constitution, thereby striking at the core values of cooperative democracy.
Accordingly, the General Body unanimously authorised MUCBF to initiate immediate dialogue with the Ministry of Cooperation and pursue all necessary measures with the Central Government and the RBI to halt the implementation of what it termed biased and unreasonable regulations. The federation was also empowered to initiate legal action, including filing a writ petition before the appropriate High Court, challenging the tenure cap and eligibility norms.
The resolution will be circulated to all member banks for adoption at their respective board meetings, and representations will be submitted to Members of Parliament, MLAs and district-level authorities across Maharashtra to mobilise collective support.
MUCBF, which represents 466 Urban Co-operative Banks across all districts of Maharashtra, reaffirmed its commitment to protecting the autonomy, democratic governance and constitutional rights of the cooperative banking sector in India.
