The Reserve Bank of India has issued the Reserve Bank of India (Urban Co-operative Banks – Governance) Amendment Directions, 2026, with immediate effect, amending the RBI (Urban
Co operative Banks – Governance) Directions, 2025. Pursuant to the amendment made by the Banking Laws (Amendment) Act, 2025, which increased the maximum continuous tenure of directors of Urban Co-operative Banks (UCBs) from eight years to ten years, RBI has introduced a mandatory cooling-off requirement to prevent circumvention of tenure limits. A director who completes a continuous tenure
of ten years on the Board of a UCB shall be eligible for re- appointment, whether through election, co-option or any other mode, only after serving a minimum cooling-off period of three years, during which the individual cannot be associated with the same UCB in any capacity other than as a member or customer. However, such person may serve as a director on the Board of another bank, subject to eligibility. For determining continuous tenure, service rendered before an interruption of less than three years will be aggregated, whereas service preceding an interruption of at least three years will be excluded from the calculation. This amendment aims to uphold the intent of the statutory tenure restrictions and strengthen governance standards in UCBs
