MUMBAI, India — The Reserve Bank of India has canceled the license of Sarvodaya Co-operative Bank Ltd. in Mumbai, citing inadequate capital and weak earnings prospects.
The central bank said Tuesday that the cancellation takes effect from the close of business on May 12, 2026.
“Consequently, the bank ceases to carry on banking business, with effect from the close of business on May 12, 2026. The Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra, has also been requested to issue an order for winding up the bank and appointing a liquidator for the bank,” the RBI said in a statement.
The RBI said that once liquidation begins, each depositor will be entitled to receive deposit insurance of up to 500,000 rupees from the Deposit Insurance and Credit Guarantee Corporation, subject to the provisions of the DICGC Act.
According to data submitted by the bank, about 98.36% of depositors were entitled to receive the full amount of their deposits from DICGC as of the date when all-inclusive directions were imposed. As of March 31, 2026, DICGC had already paid 267.2 million rupees of the total insured deposits based on willingness received from the bank’s depositors.
The RBI said Sarvodaya Co-operative Bank failed to comply with provisions of the Banking Regulation Act and that allowing it to continue operating would be against the interests of depositors.
The central bank said the bank’s current financial position made it unable to repay all existing depositors in full, adding that public interest would be harmed if it were allowed to continue banking operations.
With the cancellation of its license, Sarvodaya Co-operative Bank is barred from conducting banking business, including accepting deposits and repaying deposits, with immediate effect. (Source: IANS)
