Karnataka State Cooperative Banks’ Federation Ltd. and City Cooperative Bank Ltd. Director S.P. Seshadri has urged the Reserve Bank of India (RBI) to withdraw its amended directions requiring directors of State and District Central Cooperative Banks (DCCBs) to undergo a three-year cooling-off period after completing 10 years of continuous service.
Addressing a press conference in Shivamogga, Seshadri said the provision was against the principles of the cooperative movement and could deprive cooperative institutions of experienced leadership.
He questioned why such a cooling-off period should apply to elected representatives in the cooperative sector when no similar provision exists for elected representatives such as MPs, legislators and local-body representatives.
Seshadri said cooperative banking requires specialised knowledge of farmers, DCCBs, Primary Land Development (PLD) Banks and the rural credit system. Replacing experienced directors with newcomers, he warned, could lead to uninformed decisions and losses for cooperative institutions, ultimately affecting farmer-members.
He urged Union Home and Cooperation Minister Amit Shah and the Central and State Governments to intervene and seek reconsideration of the RBI’s amended rule in the interest of the cooperative sector.
What Mr. Sheshadi has to say to a situation where in an experienced and sincere Directors loose elections and in their place an inexperienced and corrupt directors are elected. Most of the cooperative banks have corrupt directors and are living on an illegal income earned from the bank. RBI has perfectly done the right thing in amending the act so that young minds with tech savvy hold the position and throughout the spoilt brats.
“If corruption is the problem, the RBI must identify and punish the corrupt individuals, not remove all directors after a fixed term. This rule does not ask if a director is honest. It does not ask if the bank is performing well. It asks only one question: have you served 10 years? A rule that removes the honest and the corrupt alike does not fight corruption. It simply creates a revolving door for inexperienced directors, while the legal tools to fight actual corruption already exist and are being used.”