Centre's plan can unseat most co-op bank chiefs

 Section 56 of the Banking Regulation Act, 1949, which governs all co-operative banks, has also proposed to be deleted.

 The changes have been suggested in the Banking Regulation (Amendment) Bill 2003, which was introduced in the last monsoon session of the Parliament.

 The Bill, which has been sent to a select committee of Parliament, will affect the nearly 2,090 urban co-operative banks and all the district and rural co-operative banks in the country.

 For co-operative banks, the most critical provisions of the Bill relate to the appointment of directors and chairmen.

 The Bill says that not less than 51 per cent of the directors should be persons having specialised knowledge or practical experience in accountancy, banking, finance, science & technology, economic affairs, small scale industry and agriculture. The remaining 49 per cent can be inducted as per existing norms.

 The problem is that the 49 per cent will also include reserved seats. Banks generally have a board of 20 directors. Thus, 11 (51 per cent) will be experts.

 Of the remaining nine seats, one will be reserved for SC/ ST category, one for OBC category, two for women