Surat Co-operative banks Directors Flout New Banking Law

Despite the clear-cut regulation, many influential directors continue to occupy their posts, blatantly disregarding the law in the cooperative banks in Surat. The silence and inaction of both banks and regulators have sparked widespread criticism and fears of cronyism.

By Times News Network On Jul 22, 2025

Banking Laws Amendment Act 2025 Cooperative Banks, the blunt times — The Union Finance Ministry has directed RBI to act against cooperative bank directors in Gujarat who exceeded 10 years in office

Surat, Gujarat –A storm is brewing in Gujarat’s cooperative banking sector after the Union Government’s Banking Law (Amendment)—notified on April 15, 2025—mandated that no director can hold a position in a cooperative bank for more than 10 years. Despite the clear-cut regulation, many influential directors continue to occupy their posts, blatantly disregarding the law. The silence and inaction of both banks and regulators have sparked widespread criticism and fears of cronyism.

The amendment, issued by the Law and Justice Department of the Government of India, was intended to democratize leadership in cooperative banks and curb entrenched power structures. Yet, compliance has been dismal, prompting cooperative leader Darshan Naik to raise an official representation.

“The law is clear, yet most cooperative banks are pretending like nothing has changed,” Naik said. “This is not just about legality; it’s about ethics and governance. Why are they still clinging to power?”

Following Naik’s complaint, the District Registrar asked all cooperative banks in Surat to submit reports on their board composition. Shockingly, only one bank has complied so far.

Among the few who have respected the amendment is MLA Sandeep Desai, who resigned from the District Bank director post. However, others remain unmoved. For example, Amit Gajjar, chairman of Surat People’s Co-op Bank, continues in his role despite having served 14 years as director, well beyond the legal limit.

Similarly, Sutex Bank directors including Kamal Tulsiyan, Nimesh Bachkaniwala, Nirmal Vakharia, Arun Kanodia, Kartik Hathiwala, and Bhikhubhai Desai have not resigned. In Mercantile Bank, Kamlesh Patel and Kaushik Dalal also remain in power. Though Sandeep Desai stepped down from the District Bank, directors like Kirit Patel, Sunil Patel, and Nayan Bhartiya have neither resigned nor faced action.

This blatant non-compliance has left citizens and bank stakeholders fuming.

“Are cooperative banks private fiefdoms now? The rule is 10 years. What part of that is hard to understand?” asked a senior retired bank officer in Surat who wished to remain anonymous.

In a baffling response, the District Registrar deflected responsibility by saying, “Banking regulation matters fall under the RBI’s jurisdiction. We can’t act on this.” This statement has triggered public outrage and led many to question the Registrar’s role.

“Is the District Registrar there only to oversee elections and issue ceremonial letters? Why is no one accountable?” asked Darshan Naik.

The ongoing defiance has raised serious questions about governance, enforcement, and political influence within Gujarat’s cooperative banking ecosystem. With RBI yet to act and local authorities shrugging off their duty, the spotlight now falls on the Central Bank and the Ministry of Cooperation.