RBI Removes Maharashtra Minister Babasaheb Patil from Latur Cooperative Bank Board

RBI Action Against Babasaheb Patil

Latur, Maharashtra: The Reserve Bank of India has ordered the removal of Maharashtra Cooperation Minister Babasaheb Patil from the board of the Latur District Central Cooperative Bank (Latur DCC Bank) over the tenure of cooperative bank directors.

The RBI's September 18 direction instructed the bank to remove a director who was found ineligible to continue under Section 10A(2A)(i), read with Section 56 of the Banking Regulation Act, 1949. The action concerns the statutory limit on the tenure of directors of district central cooperative banks.

What Led to the RBI Order?

The matter originated with a complaint filed by bank member Satish Sheshrao Jadhav with the RBI on May 25, 2026. Jadhav alleged that eight directors of the Latur DCC Bank had exceeded the permitted 10-year tenure and sought their disqualification.

After the RBI did not initially act on the complaint, Jadhav approached the Aurangabad bench of the Bombay High Court on June 21. On August 3, the court directed the competent authority to consider the complaint and take action within six weeks.

The RBI subsequently asked the concerned directors to submit their responses by September 10.

Seven Directors Resigned

Seven of the eight directors named in the complaint submitted their resignations on September 10. They were Ashok Shivajirao Patil Nilangekar, Shripatrao Nivruttirao Kakade, Swayamprabha Dhananjay Patil, Vyankatrao Dhondiram Birajdar, Prithviraj Harishchandra Shirsat, Pramod Jadhav and Nagorao Patil.

The bank's executive director approved the resignations and forwarded them to the RBI's general manager. Patil remained on the board and was subsequently subject to the RBI's removal direction.

What Does the 10-Year Rule Say?

The dispute centres on amendments to the Banking Regulation Act, 1949. Reports on the RBI action state that directors of district central cooperative banks are subject to a maximum continuous tenure of 10 years, under provisions brought in through the Banking Laws (Amendment) Act, 2025.

The RBI's order specifically cited Section 10A(2A)(i) read with Section 56 of the Banking Regulation Act.

The RBI maintains that the relevant provision makes a director ineligible to continue after crossing the prescribed tenure.

Babasaheb Patil Says He Will Challenge the Decision

Patil has disputed the RBI's interpretation of the tenure provision. He described the decision as “improper” and said he would challenge it before the High Court in his capacity as a bank director.

The reported High Court proceedings that preceded the RBI action involved a direction to the regulator to decide Jadhav's complaint. The court's direction itself did not constitute a final finding on Patil's eligibility; the RBI subsequently issued its own order.

Why the Case Matters

The development concerns the governance of a district-level cooperative bank and the application of the amended banking law to directors whose tenure extends beyond the statutory limit.

For Patil, the issue is separate from his role as Maharashtra's Cooperation Minister. The immediate legal question is whether the RBI's interpretation of the tenure provisions withstands the challenge Patil has indicated he will bring before the High Court.

The case could also have implications for the composition of the Latur DCC Bank's board as the legal proceedings move forward.