Amending the provisions, the Reserve Bank of India (RBI) on Monday said there have been instances where directors resorted to circumventing statutory provisions to continue on the boards of the UCBs.
In certain cases, the RBI said directors resigned briefly from office and got reelected/co-opted to the board within a short period, thereby continuing to be on the Board for an extended period beyond the legally permissible tenure.
The Reserve Bank of India (Urban Co-operative Banks – Governance) Amendment Directions, 2026, have come into force with immediate effect.
“A director on the Board of a UCB, after completing a continuous tenure of ten years in office, shall be eligible to be re-appointed, whether by election or co-option or in any other manner, as a director on the Board of the same UCB only after undergoing a minimum cooling-off period of three years,” according to the directions.
During the cooling-off period, the said director shall not be associated with the UCB in any capacity/manner other than as a member/ customer, it added.
“This, however, shall not preclude him/her from being appointed as a director on the Board of another bank, if otherwise eligible,” the RBI said.
Similar directions have been separately issued for Rural Co-operative Banks (RRBs).