1045 Co-op Bank Directors in Gujarat exceed 8-year tenure; Limit extended to 10 yrs

New Delhi: The Government of India has informed the Rajya Sabha that, following recent amendments to the Banking Regulation Act, 1949, the maximum regular tenure of directors in cooperative banks (excluding chairpersons and whole-time directors) has been increased from 8 years to 10 years. The new provision came into effect on August 1, 2025.

Responding to a starred question by MP Shaktisinh Gohil, Finance Minister Nirmala Sitharaman stated that, according to data from NABARD and the Reserve Bank of India (RBI), 1,045 directors in cooperative banks across Gujarat have been holding office for more than eight years. This includes directors in both district central cooperative banks and urban cooperative banks.

On the question regarding the government’s plan to ensure proper compliance with the law, the minister said that cooperative banks—registered under state cooperative societies acts or the Multi-State Cooperative Societies Act—fall under RBI regulation when they carry out banking activities. The RBI, in coordination with state governments and through off-site and on-site surveillance mechanisms, ensures compliance with the relevant provisions of the Banking Regulation Act, 1949.

Measures to strengthen governance include eligibility norms for directors and chairpersons, RBI’s authority to remove ineligible office-bearers and reconstitute boards, mandatory audits similar to scheduled commercial banks, and permission for cooperative banks to raise equity and unsecured debt with RBI approval to boost financial stability.

A detailed list of Gujarat-based cooperative banks with such directors—169 in district central cooperative banks and 876 in urban cooperative banks—was tabled in the House. DeshGujarat