RBI Cancels License Of Sarvodaya Co-operative Bank

Mumbai: The Reserve Bank of India (RBI) on Tuesday canceled the license of Sarvodaya Co-operative Bank, Mumbai, with effect from Tuesday, citing insufficient capital, poor earnings prospects and non-compliance with the provisions of the Banking Regulation Act. However, the central bank assured that 98 percent of depositors will receive their full deposits after the liquidation.

“During liquidation, every depositor will be entitled to receive the deposit insurance claim amount of his deposits up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC),” the RBI said in a statement.

“According to data submitted by the bank, approximately 98.36 percent of depositors were eligible to receive their entire deposits from DICGC as of the date of entry into force of the All-Inclusive Instructions.”

As on March 31, 2026, DICGC has already disbursed ₹26.72 crore of the total insured deposits.

Explaining the reasons for the cancellation of the license, the RBI said that Sarvodaya Cooperative Bank, in its current financial position, cannot make full payment to its existing depositors and public interest would be adversely affected if the bank is allowed to continue its banking business further.

Sarvodaya Cooperative Bank, Mumbai, has stopped conducting banking business with effect from close of business on May 12, 2026, the RBI statement said. The RBI has asked the Co-operative Commissioner and Registrar of Co-operative Societies, Maharashtra, to issue an order for the winding up of the bank and appoint a liquidator.