RBI Orders Removal of Maharashtra Minister Babasaheb Patil From Latur DCC Bank Board

The Reserve Bank of India (RBI) has ordered the removal of Maharashtra Cooperation Minister Babasaheb Patil from the board of the Latur District Central Cooperative Bank (Latur DCC Bank), along with seven other directors, over the statutory limit on directors' tenure.

The action follows a complaint alleging that the directors had continued in office after crossing the permissible 10-year tenure. The matter reached the Aurangabad bench of the Bombay High Court, which directed the RBI to decide the complaint. The RBI subsequently issued its removal direction on September 18, 2026.

Importantly, the RBI action concerns Patil's position as a bank director. It does not amount to an order removing him from his position as Maharashtra's Cooperation Minister.

Why Did the RBI Remove Babasaheb Patil?

The dispute centres on Section 10A(2A)(i), read with Section 56, of the Banking Regulation Act, 1949.

The Banking Laws (Amendment) Act, 2025 changed the tenure provision by inserting a specific 10-year limit for directors of cooperative banks. The amendment came into effect for the relevant provisions on August 1, 2025.

Under the amended framework, a director of a cooperative bank who has completed a continuous tenure of 10 years on or after the applicable commencement date can become ineligible to continue on the board.

The issue is therefore primarily one of banking-law compliance and board eligibility, rather than a political decision by the state government.

How Did the Latur DCC Bank Case Reach the RBI?

The sequence began with a complaint filed by Satish Sheshrao Jadhav, a member of the Latur DCC Bank.

On May 25, 2026, Jadhav approached the RBI seeking disqualification of eight directors, alleging that they had crossed the permissible tenure limit. Copies of the complaint were also submitted to relevant cooperative authorities and the NABARD section of the RBI, according to reports based on PTI.

When the matter did not result in immediate RBI action, Jadhav approached the Bombay High Court's Aurangabad bench on June 21.

On August 3, the court directed the RBI to consider and act on the complaint within six weeks.

The RBI then sought responses from the concerned directors on September 4, giving them until September 10 to respond.

Seven Directors Resigned Before the RBI Order

The proceedings resulted in seven of the eight directors named in the complaint submitting their resignations on September 10.

Those directors were:

• Ashok Shivajirao Patil Nilangekar

• Shripatrao Nivruttirao Kakade

• Swayamprabha Dhananjay Patil

• Vyankatrao Dhondiram Birajdar

• Prithviraj Harishchandra Shirsat

• Pramod Jadhav

• Nagorao Patil

Their resignations were submitted to the bank's chairman and managing director, and the bank's executive director subsequently forwarded them to the RBI general manager.

Patil, however, remained the director among the eight who had not resigned.

On September 18, the RBI directed the Latur DCC Bank to remove the director it considered ineligible under Section 10A(2A)(i), read with Section 56 of the Banking Regulation Act.

Babasaheb Patil Says He Will Challenge the Decision

The RBI's decision is being disputed by Patil.

According to Hindustan Times, Patil described the decision as improper and said he would challenge it before the High Court in his capacity as a bank director.

That means the legal position could still be contested through further proceedings. The RBI's current order should therefore be distinguished from any final judicial determination on all aspects of the dispute.

The underlying question is how the amended 10-year tenure provision applies to the director's specific service history and eligibility.

What Does the 10-Year Rule Mean for Cooperative Banks?

The Latur case is significant beyond one bank because the 2025 amendment has broader implications for India's cooperative banking sector.

The Banking Laws (Amendment) Act, 2025 amended Section 10A of the Banking Regulation Act to provide that the continuous tenure restriction would be 10 years in the case of a cooperative bank, compared with the existing eight-year wording applicable to other directors under the provision.

The RBI has subsequently issued governance directions dealing with director tenure and cooling-off arrangements for cooperative banks.

In May 2026, the RBI said its final amendment directions were intended to ensure that the statutory tenure provision is implemented in letter and spirit. The final directions covered both urban and rural cooperative banks.

For District Central Cooperative Banks, commonly known as DCCBs, the development could therefore have implications for boards where directors have held office for long periods.

Why This Matters for Cooperative Banking Governance

DCCBs play an important role in India's rural credit system, particularly in agricultural and cooperative finance.

Board composition matters because directors participate in the governance of institutions that handle deposits, extend credit and operate within the broader cooperative banking structure.

A statutory tenure ceiling can lead to changes in long-standing boards when directors become ineligible. From a governance perspective, that can mean greater turnover and a need for banks to ensure that future board appointments comply with the Banking Regulation Act and RBI requirements.

At the same time, disputes over the interpretation or application of the rule can create legal uncertainty for individual directors and cooperative institutions.

The Latur episode illustrates how a tenure issue can move from a complaint by a bank member to judicial intervention and ultimately to regulatory action.

What Happens Next?

The immediate next step is likely to be the legal challenge indicated by Patil.

The broader issue will be whether the courts uphold the RBI's application of the tenure provision in this particular case and how similar cases involving other cooperative-bank directors are handled.

For Latur DCC Bank, attention will also turn to the composition of its board following the resignations and the RBI's removal direction.

For Maharashtra's wider cooperative banking sector, the case is a reminder that the 10-year director-tenure framework is being actively enforced rather than remaining only a statutory provision on paper.

The key takeaway is that the RBI's action against Babasaheb Patil relates to his directorship at Latur DCC Bank, not his ministerial position. The case also highlights the increasing importance of tenure compliance and board-governance rules across cooperative banks.

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This article is for informational and educational purposes only and should not be considered investment advice.