RBI Cancels Licence of Sarvodaya Co-operative Bank: 98% Depositors Secured Under ₹5 Lakh Insurance [Read Notification]

TheReserve Bank of India (RBI) has cancelled the licence of Sarvodaya Co-operative Bank Ltd., Mumbai, with immediate effect, citing weak financial health and regulatory non-compliance. The order, issued under Section 22, read with Section 56 of the Banking Regulation Act, 1949, prohibits the bank from conducting any banking operations, including accepting and repaying deposits.

The RBI noted that the bank lacked enough capital and earning prospects, failed to meet multiple statutory requirements under Sections 11(1), 22(3)(a–e), and posed risks to depositors’ interests.

It also observed that the bank’s financial position made it incapable of repaying depositors in full, and allowing it to continue operations would adversely affect public interest.

Following the cancellation of its licence, Bank Ltd is prohibited from conducting the business of ‘banking’ which includes, among other things, acceptance of deposits and repayment of deposits as defined in Section 5(b) read with Section 56 of the Banking Regulation Act, 1949, with immediate effect.

Also, the Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra, has been requested to initiate winding-up proceedings and appoint a liquidator.

Under the DICGC, depositors are entitled to insurance coverage of up to ₹5 lakh per depositor. According to data submitted by the bank, 98.36% of depositors are eligible to recover their entire deposits. As of March 31, 2026, DICGC has already disbursed ₹26.72 crore to depositors who applied for settlement.

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