Reserve Bank of India cancels Sarvodaya Co-operative Bank licence
Sarvodaya Co-operative Bank deposit-taking and deposit repayment must stop from close of business 2026-05-12 under the licence-cancellation order
Change
On 2026-05-12, the Reserve Bank of India cancelled the banking licence of Sarvodaya Co-operative Bank Ltd., Mumbai under the Banking Regulation Act, 1949, effective from close of business the same day.
Why it matters
The bank is prohibited from conducting banking business, including acceptance and repayment of deposits, with immediate effect. The Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra is requested to issue a winding-up order and appoint a liquidator, shifting payouts to liquidation and deposit insurance mechanics.
Implications
- — Sarvodaya Co-operative Bank operations teams must stop banking business (including accepting and repaying deposits) from close of business 2026-05-12 — continuing banking activity breaches the licence-cancellation prohibition.
- — Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra must issue a winding-up order and appoint a liquidator — without the order and appointment, the RBI-requested liquidation process does not commence.
- — Deposit Insurance and Credit Guarantee Corporation (DICGC) claims-processing teams must pay eligible deposit insurance claims up to INR 5,00,000 per depositor on liquidation, subject to the DICGC Act, 1961 — non-payment blocks insured depositor payouts.
Who is affected
- — Sarvodaya Co-operative Bank operations teams
- — Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra
- — Deposit Insurance and Credit Guarantee Corporation (DICGC) claims-processing teams