While highlighting the government’s initiatives to revamp and strengthen cooperative banks, Union Home and Cooperation Minister Amit Shah, in a written reply in the Lok Sabha, said that the Banking Regulation Act has been amended to align the term of the Board of Directors of Cooperative Banks as per the constitution, limiting it to a maximum of 10 consecutive years.
In a step towards comprehensive reform, the Ministry of Cooperation has constituted a Task Force under NAFCUB on the ‘Transformation of Urban Cooperative Banks and Cooperative Credit Societies’. The task force has so far submitted two detailed reports.
Further, at the request of the Ministry, NABARD has submitted a report on reforms, restructuring, and innovation in Agriculture and Rural Development Banks (ARDBs), providing a strategic framework for their modernization.
Additionally, the Ministry commissioned a detailed study through IRMA (Institute of Rural Management Anand) for the National Cooperative Agriculture & Rural Development Banks’ Federation Ltd. (NAFCARD). The study culminated in an approved Action Plan aimed at expanding lending operations, promoting non-farm sector activities, and enhancing cooperative governance.
The Ministry has also completed a strategic study to elevate the role of NAFSCOB (National Federation of State Cooperative Banks) during Amrit Kaal (2022–2047).
The report outlines a roadmap for reforms in cooperative credit, digital integration, diversification of financial services, and institutional strengthening. With a strong emphasis on governance, capacity building at the state level, and inclusive outreach, the roadmap positions NAFSCOB to lead the transformation of cooperative banking and promote sustainable rural development across India.
This is my first 5 year term as director of UCB.
Studying the entire cooperative banking system and becoming well versed with it to take proper, knowledgeable and effective decisions to run it smoothly is full 5 year course to learn along with your professional or business activities. By the time you are in practical executive positions in next 5 year term (If elected again) with no experience it will be time to leave the office. The experience factor will go on toss and lead Cooperative banks in inexperienced hands in continuation. Criteria for retaining & vacating office be brought in instead of blanket capping. Public institutions should be left with choice of stakeholders to whom they wish to elect for the job. As such it is governed by RBI & State Cooperative Acts. Abiding by the rules and regulations along with growth should matter and not anything else.
But what about the Directors who have 3 years tenure at some of the states as per the respective Acts of the State (in Delhi, term of Directors is three years)
Five year term is moderate in the present scenario and for practicality. By extending the term for 10 years will give scope for autonomy. Maximum first one year is sufficient to understand norms for any educated/ qualified person. There after for the remaining four years he can serve the institution to the maximum capacity provided the member having the concern. Practically it’s well-known that all members can not be professional in all matters. It’s like sharing the responsibilities. In toto the present system of five year term is moderate.
You don’t get elected as director of cooperative Bank to learn and experiment, you get elected because you are knowledgeable in the domain and hence can contribute to the Bank. If you wish to gain knowledge of the cooperative banking field, you can get membership of a bank, actively participate in its activities and gain knowledge and later contest for directorship.
I think v need to have
one clarify?
Say in the existing Board, there are directors who have completed five year or more as on 1st August 2025, whose term will get over say as on 31/07/2028. Now the question arises as to whether such director, if re elected , will be eligible for another 5+5 years terms or only for 5 years, as the notification is prospective from 1st August 2025 ⁉️