The National Federation of State Cooperative Banks (NAFSCOB) has called for a balanced and nuanced approach to the Reserve Bank of India’s draft governance amendments proposing a three-year cooling-off period for directors of cooperative banks.
Reacting to the Draft RBI (Rural Co-operative Banks – Governance) Amendment Directions, 2026, NAFSCOB Managing Director Bhima Subramaniyam said that while the objective of enforcing the statutory cap of ten years on continuous directorship under Section 10A(2A)(i) read with Section 56 of the Banking Regulation Act, 1949 is well recognised, the implications of a mandatory cooling-off period merit deeper consideration.
He pointed out that cooperative banks function under a dual framework of the Banking Regulation Act and State Cooperative Societies Acts, and are fundamentally democratic, member-driven institutions. According to him, issues such as public interest versus cooperative community needs, regulation versus autonomy, and regulatory directions versus democratic functioning must be carefully balanced.
Subramaniyam also noted that the proposed norms should be examined in the context of the 97th Constitutional Amendment, which emphasises autonomy and democratic governance of cooperatives.