Andhra Pradesh State Cooperative Urban Bank and Credit Societies Federation has written a letter to Reserve Bank of India governor Shaktikanta Das, seeking clarity in regard to the term of office of elected board of directors of Urban Cooperative Banks.
“The different stipulations in Cooperative Societies Acts and Constitution vis-a-vis provisions of the BR Act, which are applicable to all the UCBs in Andhra Pradesh have brought forth the confusion amongst our members. As the representative organization of UCBs in the state of Andhra Pradesh, we need to clarify the position”, the letter reads.
It further added, “As the term of office of many UCBs is likely to end during early 2024, we request you to kindly direct your office to convey at the earliest, clarification, with regard to both the term of office of elected board of directors of UCBs, as also the restriction, if any, on the number of terms a Director can be elected”.
The letter was signed by its Secretary Raghavendra Rao, of which the copy is with the Indian Cooperative. “Majority of members of Andhra Pradesh State Cooperative Urban Banks and Credit Societies Federation comprise of Urban Cooperative Banks, which are registered under Andhra Pradesh Cooperative Societies Act 1964. The amendment to Banking Regulation Act 2021 has created confusion in the minds of our member UCBs as regards the term of office of elected Board of Directors”.
“As per the Clause 31(2)(a) of the Andhra Pradesh Cooperative Societies Act, 1964, the term of office of elected board of directors of UCBs is 5 (five) years while as per Section 10A (2A)(1) of the Banking Regulation Act, the term of office of elected board of directors is only 4 (four) years. Further, as per the same section of the BR Act no Director shall hold office continuously for more than 8 (eight) years, that is two terms”, the letter underlined.
It further reads, “There is no such restriction in the APCS Act. As per Section 45 (5) of the Multi State Cooperative Societies Act, 2012, as also the Mutually Aided Cooperative Societies Act also the term of office of elected Board of Director is 5 (five) years and there is no restriction on the number of terms”.
“Thus, it may be seen that all Cooperative Societies Acts are similar in this regard The Constitution’s 97 Amendment has by insertion of Article 243ZJ (2) has stipulated that the term of office of an elected Board of Director shall be 5 (five) years in addition, through amendment to Article 19(1)(c) the words ‘Cooperative Societies has made formation and voluntary membership of a Cooperative Society a fundamental right”, the letter informed.
According to the letter, “As such, whether other statutes which restrict the term of office of elected directors and/or deny the right to contest in election to a member of a Cooperative society are ultra-vires the constitution or not is a matter for constitutional experts and courts”, the letter said.