RBI cancels licence of Sarvodaya Co-operative Bank over financial weakness
13 May 2026, 11:32 AMThe central bank has also directed Maharashtra’s Registrar of Cooperative Societies to begin the bank’s liquidation process and appoint a liquidator.
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The Reserve Bank of India (RBI) has cancelled the banking licence of Sarvodaya Co-operative Bank after finding the lender financially unviable due to weak capital levels and poor earning potential.
Following the RBI’s decision, the Mumbai-based bank stopped all banking operations from the close of business on May 12, 2026, a statement said.
The central bank has also directed Maharashtra’s Registrar of Cooperative Societies to begin the bank’s liquidation process and appoint a liquidator.
Depositors of the bank will be eligible to receive insurance claims of up to Rs 5 lakh through the Deposit Insurance and Credit Guarantee Corporation. According to RBI data, over 98% of depositors are expected to recover their full insured deposits.
The RBI said the bank was unable to meet regulatory norms and lacked the financial strength to fully repay existing depositors. It added that allowing the lender to continue operations would negatively impact public interest.
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