RBI Invites Public Feedback on Draft Governance Amendments for Co‑operative Banks

The Reserve Bank of India (RBI) has released draft amendments to governance directions for urban and rural co‑operative banks for public consultation. The central bank invited stakeholders and members of the public to submit comments on or before January 30, 2026.

The draft directions aim to strengthen governance standards across co‑operative banks. They specifically address concerns related to the tenure and reappointment of directors.

Draft Governance Directions Placed for Public Consultation

On January 9, 2026, the Reserve Bank of India placed two draft governance amendment directions on its official website. These include the Draft Reserve Bank of India (Urban Co‑operative Banks – Governance) Amendment Directions, 2026 and the Draft Reserve Bank of India (Rural Co‑operative Banks – Governance) Amendment Directions, 2026.

The drafts are intended to amend the existing governance framework applicable to co‑operative banks. RBI has invited feedback from stakeholders and the general public within the specified consultation period.

Method And Timeline for Submitting Feedback

RBI has set January 30, 2026, as the deadline for submitting comments or feedback on the draft directions. Stakeholders can submit their inputs through the ‘Connect2Regulate’ section available on the Reserve Bank’s website.

This online platform is designed to facilitate structured and accessible regulatory consultations. It allows participants to share observations directly with the regulator.

Statutory Basis for The Proposed Amendments

The draft amendments are grounded in Section 10A(2A)(i) read with Section 56 of the Banking Regulation Act, 1949. These provisions prescribe a maximum continuous tenure of 10 years for directors of co‑operative banks.

RBI has observed certain governance practices that effectively circumvent this statutory limit. These include brief resignations or short interruptions between directorships followed by re‑election or co‑option.

Introduction Of Cooling‑Off Period for Directors

A key feature of the draft amendments is the proposal to introduce a minimum cooling‑off period for directors of co‑operative banks. This cooling‑off period would apply after completion of the maximum permissible continuous tenure.

The measure is intended to prevent the immediate return of individuals to the board after short disruptions. It seeks to promote board refreshment and reduce the concentration of control.

Read More: RBI Cancels Registration of 35 NBFCs.

Conclusion

RBI has initiated a public consultation on draft governance amendment directions for urban and rural co‑operative banks. The proposed changes focus on enforcing statutory limits on directors’ tenure through a mandatory cooling‑off period.

Stakeholders have been invited to submit feedback by January 30, 2026, through online, email, or postal modes. The consultation forms part of RBI’s broader efforts to enhance governance standards in the co‑operative banking system.

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