The cooperative sector in Belagavi district is poised for a significant transformation following the Centre's implementation of a 'cooling-off' rule that prohibits directors from serving more than 10 consecutive years on the same board. This regulation applies to all cooperative institutions, including housing, credit, and agricultural societies, compelling long-serving directors to seek ways to maintain their influence ahead of mandatory exits.
Legal Framework and Implications
The Banking Laws (Amendment) Act, 2025, which amends provisions of the Banking Regulation Act, 1949, imposes a cap of 10 years on the continuous tenure of cooperative bank directors. Directors exceeding this limit are classified as 'ineligible directors' and must undergo a mandatory cooling-off period. Consequently, the Reserve Bank of India (RBI) has enforced a three-year cooling-off period during which such directors cannot be associated with the same bank in any capacity, except as ordinary customers. However, they are permitted to join the boards of other cooperative banks, provided they meet eligibility criteria.
Impact on Belagavi's Cooperative Landscape
The impact is expected to be substantial in Belagavi, a stronghold of the cooperative movement with over 4,000 credit societies, many of which have been led by the same individuals for decades. The new rule will also affect the Belagavi District Central Cooperative (BDCC) Bank, where approximately five senior directors, including chairman Annasaheb Jolle and MLA Laxman Savadi, have exceeded the 10-year tenure cap.
Whistleblower Basavaraj Kurer has demanded enforcement of the rule at BDCC Bank and submitted a representation to the RBI. The matter has been forwarded to NABARD and the Registrar of Cooperative Societies in Bengaluru for further action. Kurer alleged that despite directives issued nearly two weeks ago, no action has been taken, purportedly due to political pressure. He warned of escalating the issue if delays persist.
