RBI Cancels Licence of Sarvodaya Co-operative Bank Ltd., Mumbai Over Poor Financial Condition
The Reserve Bank of India (RBI), through an order dated 12 May 2026, has cancelled the licence of “Sarvodaya Co-operative Bank Ltd., Mumbai” under the Banking Regulation Act, 1949.
The bank has been ordered to stop carrying out banking business from the close of business on 12 May 2026. RBI has also requested the Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra, to issue an order for winding up the bank and appoint a liquidator.
RBI cancelled the bank’s licence because the bank did not have adequate capital and earning capacity. The bank also failed to comply with several provisions of the Banking Regulation Act, 1949.
According to RBI, continuation of the bank was harmful to the interests of depositors. RBI said the bank, in its current financial condition, would not be able to fully repay its depositors. The central bank also stated that allowing the bank to continue banking operations would negatively affect public interest.
Following the cancellation of its licence, Sarvodaya Co-operative Bank Ltd., Mumbai has been prohibited from carrying out any banking activities, including accepting deposits and repaying deposits, with immediate effect.
RBI said that after liquidation, every depositor will be eligible to receive deposit insurance up to ₹5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC), subject to the provisions of the DICGC Act, 1961.
As per the data submitted by the bank, around 98.36% of the depositors were eligible to receive the full amount of their deposits from DICGC on the date when All Inclusive Directions were imposed on the bank.
RBI further said that as on 31 March 2026, DICGC had already paid ₹26.72 crore towards insured deposits under Section 18A of the DICGC Act, 1961, based on the willingness received from eligible depositors of the bank.
