The Reserve Bank of India (RBI) has ordered the immediate removal of Babasaheb Patil, the minister of cooperation in Maharashtra, from the board of the Latur District Central Cooperative (DCC) Bank, holding that he is ineligible to continue as a director under the Banking Regulation Act. The action follows a complaint over the tenure of eight directors of the bank, seven of whom resigned after the RBI sought their responses.
Mr Patil, however, has disputed the regulator's interpretation of the law and questioned the applicability of the ten-year tenure restriction to his case. The minister has said he will contest the RBI's decision before the Bombay High Court (HC), according to reports.
The RBI's 18 September 2026 order said eight directors were found to be holding office in violation of Section 10A(2A)(i) of the Banking Regulation Act as of 3 August 2026. While seven subsequently stepped down, Mr Patil remained on the board, prompting the central bank to direct the Latur DCCB to remove him with immediate effect.
The dispute dates back to 25 May 2026, when Latur resident and bank member Satish Sheshrao Jadhav filed a complaint to RBI against eight directors of Latur DCC Bank, alleging that they had crossed the permissible tenure limit. Mr Jadhav also raised issues relating to recruitment at the bank and sought the appointment of an administrator.
After RBI did not act on the complaint, Mr Jadhav approached the Aurangabad bench of the Bombay HC on 21 June 2026. On 3 August 2026, the HC directed the competent authority to decide the complaint on its merits within six weeks.
RBI subsequently sought responses from the eight directors. Seven resigned on 10th September, with their resignations being approved by the bank and forwarded to RBI. Mr Patil instead submitted written explanations to the regulator on 15th September and 16 September 2026.
A key issue before the regulator was whether the statutory tenure restriction could be applied to directors who were already in office when the relevant provisions came into force.
Mr Patil argued that the tenure restriction should not be applied retrospectively. According to his submissions, the directors had been elected in 2021 and the ten-year period would therefore not expire until 2031. He also pointed to the ongoing election process for Latur DCC Bank's 2026-31 board and argued that the existing board's term was due to end on 26 October 2026.
RBI, however, rejected that reasoning from Mr Patil. The regulator said applying the provision to a director's current eligibility did not amount to retrospectively treating the earlier service as an offence. In its view, the fact that part of a director's continuous tenure predated the statutory provision did not preclude its application in determining whether the person could continue in office.
RBI also rejected Mr Patil's other submissions and declined his request for a personal hearing, saying he had already been given an opportunity to submit his position in writing.
Mr Patil has maintained that the RBI's decision is improper and has questioned the legal basis for his removal.
In his response to the controversy, he argued that if the ten-year limit introduced in 2021 were counted from the date of his election, the relevant period would not expire until 2031. He has also questioned whether the provision has been applied consistently to long-serving directors of cooperative banks in other districts.
The reports on the matter contain differing accounts of Mr Patil's position on whether he will approach the court. The RBI-order-related report says he intends to challenge the decision, while a
separate PTI report quotes him as saying he would examine the issue and that he could not take a position against RBI as a member of the government.
The action has broader significance for Maharashtra's district cooperative banking network, where politicians and local leaders have traditionally played a prominent role on bank boards.
The amended Banking Regulation Act provides for a maximum continuous tenure of ten years for directors of DCCBs and central cooperative banks. The reports state that the relevant provisions were introduced in the cooperative banking framework in 2021 and subsequently amended through the Banking Laws (Amendment) Act, 2025.
According to officials cited in the reports, the amended framework makes a director of a cooperative bank, who had completed ten years of continuous tenure on or after 1 August 2025, ineligible to continue. The interpretation has potentially significant consequences for long-serving directors across Maharashtra's cooperative banking sector.
A senior politician, who is also a cooperative bank director,
told Hindustan Times that many board members had expected the state to first amend its cooperative laws and frame corresponding rules. The RBI's interpretation, he said, could affect several politicians who have remained on cooperative bank boards for decades.
The Maharashtra cooperation department had also requested clarification from RBI in March on the interpretation of the amended provisions, according to officials cited in the reports.
For now, the immediate consequence is clear: Mr Patil has been directed to vacate his position on the Latur DCCB board. The legal challenge he has indicated could determine how the tenure provisions are interpreted in his case and potentially provide clarity for other long-serving directors of cooperative banks in the state.
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