The action follows a complaint alleging that Patil and seven other directors had exceeded the permissible tenure under the Banking Regulation Act

Published on: Sep 20, 2026, 07:57:10 IST

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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. While the other seven directors resigned after the RBI sought their responses, Patil continued in office. 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.

The action could have wider implications for Maharashtra’s district cooperative banking sector, where local politicians have held sway over bank boards for decades. In Patil’s case, the RBI order notes that he has held the post of director for more than 39 years.

“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. Out of the eight directors, seven have already resigned from office. 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.

“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.

is in possession of a copy of the nine-page order.

The dispute began on May 25, when Latur resident Satish Sheshrao Jadhav filed a complaint with the RBI alleging that Patil and seven other directors had crossed the permissible tenure limit. Jadhav sought their disqualification, raised objections to the bank’s staff recruitment process, and also sought the appointment of an administrator.

The matter subsequently reached the Aurangabad bench of the Bombay High Court. On August 3, the court directed the competent authority to decide Jadhav’s complaint on its merits within six weeks.

Following the court’s intervention, the RBI sought responses from the eight directors. Seven resigned, while Patil submitted two clarifications to the regulator on September 15 and 16.

Patil argued that the tenure restriction could not be applied retrospectively. “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.

He also cited the ongoing election process for the bank’s board for the 2026-31 term, saying the state cooperative election authority had approved the programme, with filing of nominations scheduled to begin on September 21.

“Since the term of the current board will automatically expire on October 26, any action contemplated under Section 10A(2A)(i) of the BR Act is futile and superfluous,” Patil said.

The RBI rejected the argument, holding that applying the statutory provision to Patil did not amount to retrospective application.

“Merely because a part of the continuous tenure of a director falls before the date of coming into force of the statutory provision does not make the implementation of the provision ‘retrospective’,” the RBI said.

The regulator noted that Patil had held the post of director for more than 39 years. It said retrospective application would mean treating the provision as having been violated before the amendment came into force, which was not the case.

The RBI also rejected Patil’s other submissions and declined his request for a personal hearing, saying he had already been given an opportunity to make written submissions.

Patil, however, disputed the RBI’s interpretation and said he would contest the order in court.

“The RBI’s decision is improper as we cannot remove the directors of the cooperative bank under that particular provision. Hence, I will challenge it before the high court in my capacity as a bank director,” he said.

The RBI’s order comes amid wider scrutiny of long-serving directors of district central cooperative banks. Under the amended Banking Regulation Act, directors of DCCBs and central cooperative banks are subject to a maximum 10-year continuous tenure.

A senior politician who is also a director of a cooperative bank said the RBI’s action could affect several such directors. “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. 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. 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.

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