A representation submitted by Eknath Mane, a visitor on the Indian Cooperative platform, has urged the Reserve Bank of India (RBI) and NABARD to implement the proposed cooling-off period for directors of co-operative banks prospectively, particularly in the case of District Central Co-operative Banks (DCCBs).
While supporting the RBI’s objective of strengthening governance, transparency, and long-term sustainability in the co-operative banking sector, the representation cautions against retrospective application of the cooling-off provision by counting past tenures.
It argues that DCCBs form the backbone of the rural and agricultural credit structure, acting as a crucial link between Primary Agricultural Credit Societies (PACS) and State Co-operative Banks, and rely heavily on experienced leadership and institutional memory.
The submission notes that boards of many DCCBs include Members of Parliament, MLAs, ministers, and senior co-operative sector experts, whose experience and credibility play a key role in depositor confidence, loan recovery, credit discipline, and effective rural credit delivery. A simultaneous exit of such directors due to retrospective application, it warns, could disrupt operations, weaken recovery efforts, and pose governance and compliance risks.
The representation therefore recommends a phased and prospective implementation of the cooling-off norms to ensure orderly leadership transition, capacity building of new directors, and protection of depositor interests, while maintaining uninterrupted rural credit flow.