Under the new RBI rules for UCB directors re-appointment, a person cannot serve continuously as a director for more than 10 years. After completing the tenure, the individual must observe a compulsory three-year cooling-off period before returning to the board.

The central bank introduced the amendment to stop misuse of existing rules and strengthen transparency in co-operative banks. The updated guidelines came into effect immediately.

The RBI believes the move will improve accountability and ensure better management practices in Urban Co-operative Banks across the country. Banking experts say the decision could help strengthen public trust in the co-operative banking sector.

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