Mumbai: The Reserve Bank of India (RBI) has directed the removal of Maharashtra cooperation minister Babasaheb Patil from the board of the Latur District Central Cooperative Bank (DCCB), holding that his continued tenure as a director violated the statutory limit on the continuous tenure of a bank director.
The action follows a complaint alleging that Patil and seven other directors had exceeded the permissible tenure under the Banking Regulation Act. Patil continued in office While the other seven directors resigned after the RBI sought their responses.
He has rejected the RBI’s decision as “improper” and said he would challenge it before the high court.
The RBI action is being seen as a major embarrassment for the Mahayuti government, with Patil, an NCP minister, overseeing the politically powerful cooperative sector. Out of the eight directors, seven have already resigned from office. Patil argued that the tenure restriction could not be applied retrospectively. “We all were under the impression that the state government will have to formally adopt the law by framing its own law and rules as cooperative banks operating within a single state belong to the State List. This would have given us more time.
“As of August 3, 2026, eight directors holding the office of director on the Latur DCCB board in violation of the provisions contained in Section 10A(2A)(i) of the Banking Regulation Act. However, Babasaheb Patil continues to hold office in violation of the said Act,” said an order issued by Scenta Roy, chief general manager, RBI, on September 18. “The directors have already been elected in 2021. Since the statutory restriction also applies from April 1, 2021, the ten-year ceiling enhanced from eight years by the Banking Laws (Amendment) Act 2025, will only mature in the year 2031, making any claim of a violation in 2026 legally unsustainable,” he said in his reply. The RBI subsequently clarified that under Sections 10A(2A)(i) and 56 of the Banking Regulation Act, a cooperative-bank director who has completed 10 years of continuous tenure on or after August 1, 2025, when the relevant amendment came into force, is ineligible to continue in office.
“In view of the foregoing, Latur DCCB is hereby directed to remove Babasaheb Patil as a director of the bank with immediate effect,” the order said. A senior politician who is also a director of a cooperative bank said the RBI’s action could affect several such directors. But the RBI decision will have a very bad impact on all of us as most of the politicians are board directors of various banks for decades now,” he said. The state government had sought clarification from the RBI in March on the interpretation of the amended provisions, government insiders said.
