RBI Cancels Sarvodaya Co-op Bank Licence

The Reserve Bank of India on Tuesday cancelled the licence of Sarvodaya Co-operative Bank, citing inadequate capital, poor earnings prospects, and non-compliance with provisions of the Banking Regulation Act.

RBI said the co-operative bank would cease to carry on banking business effective May 12, 2026.

The Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra, has also been requested to initiate the process of winding up the bank and appoint a liquidator.

The RBI said depositors would be entitled to receive deposit insurance claims of up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC).  

According to data submitted by the bank, around 98.36 per cent of depositors were eligible to receive the full amount of their deposits from DICGC as on the date of imposition of All Inclusive Directions.

The RBI said the bank had failed to comply with multiple regulatory requirements under the Banking Regulation Act. 'The bank with its present financial position would be unable to pay its present depositors in full,' RBI said.

Following the licence cancellation, the bank is prohibited from undertaking banking business, including acceptance and repayment of deposits, with immediate effect. DICGC had already paid Rs 26.72 crore towards insured deposits as of March 31, 2026.

-- Subrata Kumar Panda, Business Standard