The contentious 10-year tenure limit for directors of Urban Cooperative Banks (UCBs) came under strong criticism at the 50th Annual General Meeting (AGM) of the National Federation of Urban Co-operative Banks and Credit Societies Ltd. (NAFCUB), with delegates from across the country urging the federation to take up the issue with the regulatory authorities.
The issue emerged as one of the key concerns during the AGM, as cooperative leaders argued that the tenure restriction could result in the loss of experienced leadership and affect the democratic rights of cooperative members to elect their representatives.
Delegates called for a formal resolution opposing the restriction and urged NAFCUB to pursue the matter with the Reserve Bank of India (RBI) and the Central Government.
N.M. Suresh, Chairman of Malleswaram Cooperative Bank, Karnataka, strongly raised the issue during the deliberations. Questioning why the matter had not received adequate attention despite its significance, he urged NAFCUB to intervene and support the concerns of member cooperative banks.
Responding to the demand, the AGM passed a resolution opposing the 10-year tenure restriction. NAFCUB President Laxmi Das said the delegates had passed the resolution and that the federation would now have to decide how to take the matter forward.
The issue also received strong backing from M. R. Venkatesh, Chairman of Sree Thyagaraja Cooperative Bank, who described the tenure restriction as a major concern for the cooperative banking sector. He urged NAFCUB to raise the issue at the highest level, including with Union Minister for Cooperation Amit Shah, and seek a practical solution.
One of the delegates also argued that the tenure of directors should not become a factor in determining whether a cooperative bank is granted Scheduled status. The concern was that banks with directors who have completed 10 years could potentially face an indirect disadvantage when seeking Scheduled status, despite meeting other eligibility requirements.
Abdul Jeelan Shaikh of the Andhra Pradesh UCB Federation stressed the need to protect the autonomy and democratic character of cooperative institutions. He questioned why such restrictions should specifically apply to cooperative bank directors when elected representatives in other democratic institutions are not subject to comparable tenure limits.
The legal aspects were highlighted by H. K. Patil, NAFCUB Chairman Emeritus, who said the matter had
already been pursued through legal and institutional channels. He noted that cooperative banking federations from Andhra Pradesh, Karnataka and Maharashtra had approached the courts over the tenure issue. He also cautioned against politicising the matter and called for equal treatment of cooperative institutions.
Meanwhile, Jagdish Verma of the Assam UCB Federation pointed to differences between state cooperative laws and RBI regulations concerning directors’ tenure and called for greater clarity and uniformity.
With the AGM resolution, the 10-year tenure issue has gained renewed prominence on NAFCUB’s agenda. The next step will depend on how the federation decides to pursue the matter before the RBI and the Central Government.
