RBI orders removal of seven directors from co-op bank’s board in Dharashiv over tenure violation

Chhatrapati Sambhajinagar: The Reserve Bank of India (RBI) has ordered a co-operative bank in Dharashiv to immediately remove seven directors from its board for exceeding the maximum tenure of 10 years allowed under the Banking Regulation Act.In an order issued by RBI chief general manager Scenta Joy on May 25, the central bank found the directors in violation of Section 10A(2A)(i) read with Section 56 of the Banking Regulation Act, 1949, which sets limits on the continuous tenure of directors in urban cooperative banks. Dharashiv collector Keerthi Kiran Pujar told TOI, "The district deputy registrar has received official communication regarding the removal of the seven directors for breach of tenure norms.”The action comes as part of RBI’s broader push to strengthen governance standards in urban cooperative banks. Recently, the regulator introduced the Reserve Bank of India (Urban Cooperative Banks — Governance) Amendment Directions, 2026, which mandated a three-year cooling-off period for directors who completed 10 years of continuous service on a bank’s board.RBI said some directors had been attempting to bypass tenure restrictions by temporarily stepping down and then rejoining the board through re-election or co-option, thereby extending their tenure beyond permissible limits.

The new rules, effective immediately, are aimed at curbing such practices, it said.The central bank also highlighted that the Banking Regulation (Amendment) Act, 2020 introduced an eight-year cap on continuous tenure, effective June 29, 2020. This limit was subsequently revised to 10 years under the Banking Laws (Amendment) Act, 2025, with effect from Aug 1, 2025.In its findings related to the bank in Dharashiv, the RBI observed that the seven directors had remained on the board for over 10 years. The RBI said none of these individuals disputed the fact that they had served continuously beyond the allowed tenure. It further stated that their submissions did not alter the finding of statutory violation.