RBI removes Maha Minister from Latur bank board over tenure violations
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Latur, Sep 19 : In a major setback for Nationalist Congress Party (NCP) leader and Maharashtra Cooperation Minister Babasaheb Patil, the Reserve Bank of India (RBI), in a communication dated September 18, dismissed him from the Board of Directors of the Latur District Central Co-operative Bank. The action follows allegations that Patil violated regulatory norms by serving on the board for over a decade.
Patil, who served as a director for more than 10 years, was found to have breached RBI governance guidelines for co-operative banks. Unwilling to step down, the minister has announced plans to challenge the RBI’s order in court.
The action stems from a formal complaint filed on May 25, 2026, by Satish Jadhav, a member of the Latur District Co-operative Bank. Jadhav alleged that 8 of the 19 members on the bank’s board, including Patil, had held their positions for more than 10 years, violating regulatory guidelines.
Under RBI rules governing primary and district central co-operative banks, an individual who has served as a director for a continuous tenure exceeding 10 years is disqualified from contesting subsequent elections or retaining a seat on the board. The rule aims to prevent entrenched control and enforce corporate governance standards.
Following the complaint, Jadhav filed a petition before the Chhatrapati Sambhajinagar (Aurangabad) Bench of the Bombay High Court. Acting on the court’s directives and RBI’s tenure policy, seven of the eight affected directors resigned.
However, Patil refused to resign, prompting the RBI to issue a direct order removing him from the post. He has now decided to approach the judiciary to challenge the dismissal.
Under Section 10A of the Banking Regulation Act (as applied to Co-operative Societies) and subsequent RBI governance directives, limits were imposed on how long directors could serve continuously on co-operative bank boards. The rule aims to improve financial oversight, reduce political patronage, and introduce fresh management into District Central Co-operative Banks (DCCBs).
In Maharashtra, DCCBs serve as critical credit channels for agricultural loans and sugar co-operatives, making control over their boards politically influential across rural constituencies.
As Maharashtra’s Minister for Cooperation, Patil oversees co-operative institutions across the state. His dismissal from his home district’s co-operative bank board creates a significant political contrast between his cabinet portfolio and regulatory compliance.
Patil, who served as a director for more than 10 years, was found to have breached RBI governance guidelines for co-operative banks. Unwilling to step down, the minister has announced plans to challenge the RBI’s order in court.
The action stems from a formal complaint filed on May 25, 2026, by Satish Jadhav, a member of the Latur District Co-operative Bank. Jadhav alleged that 8 of the 19 members on the bank’s board, including Patil, had held their positions for more than 10 years, violating regulatory guidelines.
Under RBI rules governing primary and district central co-operative banks, an individual who has served as a director for a continuous tenure exceeding 10 years is disqualified from contesting subsequent elections or retaining a seat on the board. The rule aims to prevent entrenched control and enforce corporate governance standards.
Following the complaint, Jadhav filed a petition before the Chhatrapati Sambhajinagar (Aurangabad) Bench of the Bombay High Court. Acting on the court’s directives and RBI’s tenure policy, seven of the eight affected directors resigned.
However, Patil refused to resign, prompting the RBI to issue a direct order removing him from the post. He has now decided to approach the judiciary to challenge the dismissal.
Under Section 10A of the Banking Regulation Act (as applied to Co-operative Societies) and subsequent RBI governance directives, limits were imposed on how long directors could serve continuously on co-operative bank boards. The rule aims to improve financial oversight, reduce political patronage, and introduce fresh management into District Central Co-operative Banks (DCCBs).
In Maharashtra, DCCBs serve as critical credit channels for agricultural loans and sugar co-operatives, making control over their boards politically influential across rural constituencies.
As Maharashtra’s Minister for Cooperation, Patil oversees co-operative institutions across the state. His dismissal from his home district’s co-operative bank board creates a significant political contrast between his cabinet portfolio and regulatory compliance.
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Note: The content of this article is sourced from a news agency and has not been edited by the ap7am team.