The Reserve Bank of India’s Shimla Regional Office on Tuesday issued an advisory email to co-operative banks in Shimla, directing them to ensure that any director completing a continuous tenure of ten years on or after August 1, 2025, shall be ineligible to continue in office.
The advisory, issued by the Department of Supervision, RBI Shimla Regional Office, cites Section 10A(2A)(i) read with Section 56 of the Banking Regulation Act, 1949, as amended by the Banking Laws (Amendment) Act, 2025. It instructs co-operative banks to adhere to these guidelines and confirm compliance within 10 days.
However, it is noteworthy that no official circular or press release has been issued by the RBI’s Central Office in this regard, and the email appears to have been sent as a regional supervisory communication to specific co-operative banks.
Reacting to the development, Vijay Mohan, President of the Delhi Urban Cooperative Banks Federation (DUCBF), said, “It has started with just ten days’ notice to relinquish the post. Time has come to decide if we have to move the High Court or Supreme Court to seek relief.
“The amendment is unconstitutional in the context of co-operative banks where the management board is elected democratically under state laws. All federations and banks need to unite together against this arbitrary order,” he added.
It is learned that the advisory email sent by the RBI Shimla office was addressed to co-operative banks in the backdrop of last month’s elections at the Himachal Pradesh-based Jogindra Central Cooperative Bank. In this case, director Vijay Thakur, who had completed two terms and was re-elected for a third term, has now been ineligible as per the RBI email.