RBI Removes Maharashtra Minister Babasaheb Patil from Latur Cooperative Bank Board

Why the RBI acted

The Reserve Bank of India directed the Latur District Central Cooperative Bank to oust its chairman and seven other directors after finding they had served more than ten consecutive years on the board [1]. The rule is meant to stop long‑standing control and encourage regular renewal of leadership in cooperative banks.

How the case unfolded

A complaint filed on 25 May 2026 by bank member Satish Jadhav alleged that eight directors, including Maharashtra Cooperation Minister Babasaheb Patil, had exceeded the tenure limit set by the Banking Regulation Act, 1949 as amended by the Banking Laws (Amendment) Act, 2025 [1]. After the Bombay High Court’s Aurangabad bench asked the RBI to act within six weeks, the central bank sought written responses from the directors by 10 September 2026 [1].

Seven directors resigned on that date, while Patil declined to step down and said he would contest the RBI’s order in court [2].

Legal basis and minister’s response

The RBI’s order cites Sections 10A(2A)(i) and 56 of the Banking Regulation Act, 1949, which impose a ten‑year cap on continuous service for directors of district central cooperative banks [1]. Patil, a Nationalist Congress Party minister, told PTI that he would not challenge the RBI’s directive but questioned whether the ten‑year rule, introduced in 2021, could be applied retrospectively to appointments made before that year [1].

Possible legal challenge and outlook

Contrary to his earlier statement, Patil has announced his intention to approach the judiciary to contest the removal, highlighting a disagreement among sources about his next legal step [2]. The episode shows the RBI’s willingness to enforce governance norms even when a sitting state minister is involved, and may prompt other states to review the composition of their cooperative bank boards [1] [2]. District Central Cooperative Banks in Maharashtra are key conduits for agricultural loans and sugar‑cooperative financing, making their boards politically significant [2]. Observers note that the RBI’s action could affect future elections within these institutions, as the tenure rule aims to prevent entrenched control and promote fresh management [2].