Karnataka Cooperation Minister Laxman Savadi has strongly opposed the Reserve Bank of India’s directive restricting directors of urban cooperative banks from continuing in office after completing 10 years of service without a mandatory three-year cooling-off period, according to media reports.
Speaking to reporters after participating in Independence Day celebrations in Karwar, Savadi questioned the RBI’s authority to impose such a restriction, arguing that only the Central or state governments have the power to introduce such provisions.
The RBI’s directive has triggered legal challenges across several states, with directors approaching courts to seek a stay on its implementation. In Karnataka, several directors of district central cooperative banks and urban cooperative banks are awaiting the outcome of cases pending before the High Court.
Savadi warned that removing experienced directors could adversely affect cooperative banks, as many institutions depend on long-serving leaders who have earned the confidence of members and depositors.
His remarks have provided relief to directors facing possible disqualification under the RBI’s tenure-related norms.
