Centre’s cooling-off rule set to shake up Belagavi cooperative scene

Belagavi: The cooperative sector in Belagavi district is headed for a major churn following the Centre’s ‘cooling-off’ rule that bars directors from serving over 10 consecutive years on the same board. The norm applies to all cooperative institutions, including housing, credit, and agricultural societies, prompting long-serving directors to explore ways to retain influence ahead of mandatory exits.

The Banking Laws (Amendment) Act, 2025, which modifies provisions of the Banking Regulation Act, 1949, caps the continuous tenure of cooperative bank directors at 10 years. Those exceeding this limit are termed “ineligible directors” and must undergo a mandatory cooling-off period. Accordingly, the Reserve Bank of India has enforced a three-year cooling-off period, during which such directors cannot be associated with the same bank in any role, except as ordinary customers. However, they may join boards of other cooperative banks, subject to eligibility criteria.

The impact is expected to be significant in Belagavi, a cooperative stronghold with over 4,000 credit societies, many of which have been led by the same individuals for decades.

The new rule is set to hit the Belagavi District Central Cooperative (BDCC) Bank as well, where around five senior directors, including chairman Annasaheb Jolle and MLA Laxman Savadi, have crossed the 10-year tenure cap.

Meanwhile, whistleblower Basavaraj Kurer has sought enforcement of the rule at BDCC Bank and submitted a representation to the RBI. The matter has been forwarded to NABARD and the Registrar of Cooperative Societies in Bengaluru for action. Kurer alleged that despite directions being issued nearly two weeks ago, no action has been taken, allegedly due to political pressure. He warned of escalating the issue if delays continue.