The Karnataka High Court has also continued the interim relief granted in the writ petition filed by the Karnataka State Cooperative Urban Banks Federation Ltd., which challenges the Reserve Bank of India’s Urban Cooperative Banks Governance Amendment Directions, 2026 introducing a 10-year tenure cap and three-year cooling-off period for directors of Urban Cooperative Banks (UCBs).
Hearing the batch of connected petitions on July 7, Justice Suraj Govindaraj ordered that the interim protection already granted would continue until the next hearing, scheduled for July 31.
The Federation has argued that the RBI’s amendment directions issued on May 25, 2026, and the related provisions of the Banking Laws (Amendment) Act, 2025, are unconstitutional as they impose tenure restrictions on directors of cooperative banks governed by the Karnataka Cooperative Societies Act. It contends that regulation of cooperative societies falls within the States’ legislative domain under Entry 32 of List II of the Constitution.
The petition seeks to quash the RBI directions and prevent any action against UCB directors under the amended provisions. The case is being closely watched by UCBs across the country, particularly in Maharashtra, where a similar challenge is pending before the Bombay High Court.
