Recent re-elections of chairpersons in certain urban cooperative banks (UCBs) in Karnataka have renewed discussions within the cooperative banking sector over the interpretation and applicability of tenure norms governing board-level leadership positions.
The debate has gained momentum following leadership elections at Suco Souharda Bank and Sahyadri Mahila Pattana Sahakara Bank. While the elections at Suco Souharda Bank were conducted under the Karnataka Souharda Sahakari Act, those at Sahyadri Mahila Pattana Sahakara Bank were held under the Karnataka Cooperative Societies Act and overseen by the State Cooperative Election Authority.
According to sources in the cooperative sector, at Sahyadri Mahila Pattana Sahakara Bank, a few directors who had completed ten years on the board were re-elected in the latest election. The bank’s chairperson, Veeramma P, was also re-elected for a third consecutive term. In the case of Suco Souharda Bank, the chairman has been re-elected and is understood to have served for more than ten years; however, the other elected directors in this case are yet to complete the prescribed tenure.
It is also gathered that the Returning Officer did not raise any objections regarding the eligibility of the directors during the conduct of the election.
Under the existing framework, individuals are first elected as directors, after which the board elects the chairperson and vice-chairperson from among the elected directors. There is no provision for the direct election of the chairperson and vice-chairperson in Karnataka.
These developments are also being viewed in the context of a recent amendment to the Banking Regulation Act that came into effect on August 1, 2025. The amendment increased the maximum continuous tenure of cooperative bank directors, excluding chairpersons and whole-time directors, from eight years to ten years, with the objective of strengthening governance stability and continuity in cooperative banks.
Cooperative sector leaders maintain that leadership elections conducted under the supervision of competent authorities and in accordance with the applicable statutory framework remain valid. They point out that in the case of banks registered under State cooperative laws and not operating as multi-State entities, elections are conducted by the State Cooperative Election Authority or the Registrar of Cooperative Societies, as prescribed under the respective Acts.
However, observers note that the simultaneous application of State cooperative laws and central banking regulations, particularly in relation to tenure norms, has resulted in areas of regulatory overlap, highlighting the need for clearer interpretation and possible harmonisation.
As similar cases are being closely watched across Karnataka, developments at Suco Souharda Bank and Sahyadri Mahila Pattana Sahakara Bank are increasingly being viewed as important reference points in the broader discussion on leadership tenure, regulatory interpretation, and governance practices within the state’s urban cooperative banking sector.