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RBI cancels licence of Sarvodaya Co-operative Bank, Mumbai for regulatory non compliance, orders winding up, most depositors to get insured refunds via DICGC
RBI cancels the licence of Sarvodaya Co-operative bank
The Reserve Bank of India (RBI) has cancelled the licence of Sarvodaya Co-operative Bank, Mumbai, for failing to comply with the central bank’s norms and requirements. The bank ceased to carry on banking business from May 12, 2026.
“Consequent to the cancellation of its licence, “Sarvodaya Co-operative Bank Ltd., Mumbai” 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,” RBI announced in the statement.
RBI also requested the Commissioner for Cooperation and Registrar of Cooperative Societies, to issue an order for winding up the bank (Sarvodaya Co-operative Bank) and appoint a liquidator for the bank.
Failing to have adequate capital and earning prospects, complying with the requirements of the Banking Regulation Act, 1949, among others, are the major reasons behind RBI’s action against the bank.
What Should Depositors Need To Know?
According to RBI regulations, every depositor can claim to get deposit insurance claim of his/her deposits up to Rs 5 lakh. It can be claimed from Deposit Insurance and Credit Guarantee Corporation (DICGC).
As per the data submitted by the bank, about 98.36% of the depositors were entitled to receive full amount of their deposits from DICGC as on date of imposition of All Inclusive Directions. As on March 31, 2026, DICGC has already paid Rs 26.72 crore of the total insured deposits under the provisions of Section 18A of the DICGC Act, 1961, based on the willingness received from the concerned depositors of the bank.
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