The Reserve Bank of India has amended its Urban Co-operative Banks Governance Directions, 2025 to require any director of a primary urban co-operative bank who completes ten years of continuous service on the same board to undergo a minimum three-year cooling-off period before being reappointed, whether by election, co-option or any other route. The amendment takes effect immediately and is aimed at preventing directors from extending their stay beyond the legal limit by briefly resigning and then returning to the board. During the cooling-off period, the former director cannot be associated with the same urban co-operative bank in any capacity other than as a member or customer, although appointment to the board of another bank remains possible if the person is otherwise eligible. For calculating continuous tenure, service before a break of less than three years will still count, while service before an interruption of at least three years will not. The change follows the Banking Laws (Amendment) Act, 2025, which raised the maximum continuous tenure for urban co-operative bank directors from eight years to ten years with effect from August 1, 2025.
Reserve Bank of India2026-05-25
Reserve Bank of India requires three year cooling off after ten years for urban co operative bank directors
The Reserve Bank of India has amended its Urban Co-operative Banks Governance Directions, 2025 to require a minimum three-year cooling-off period for any director of a primary urban co-operative bank who completes ten years of continuous service on the same board before reappointment. During the cooling-off period, the individual may only be a member or customer of that bank, with breaks of less than three years treated as continuous service. The change aims to prevent circumvention of the statutory tenure limit and follows the Banking Laws (Amendment) Act, 2025, which raised the maximum continuous tenure for such directors from eight to ten years.