Mumbai, May 13: The Reserve Bank of India (RBI) has revoked the banking license of Sarvodaya Cooperative Bank Limited, located in Mumbai. The central bank announced this decision on Tuesday, citing the bank’s weak financial condition, lack of adequate capital, and poor earning prospects in the future. This decision took effect after business hours on May 12.
The RBI stated in a press release that the bank failed to comply with the Banking Regulation Act’s regulations. Continuing operations under the current circumstances was deemed not in the best interest of depositors. Following the revocation of the license, the bank has been instructed to cease all banking services immediately, including accepting deposits and returning funds to customers.
The RBI has directed the Registrar of Cooperative Societies in Maharashtra to initiate the process of closing the bank and appoint a liquidator. The liquidator will handle the settlement of the bank’s assets and liabilities.
According to the central bank, the bank is currently unable to return the full amount of deposits to its customers. However, account holders with deposits up to ₹5 lakh will receive their funds back under the Deposit Insurance and Credit Guarantee Corporation (DICGC).
The RBI noted that approximately 98.36% of the bank’s depositors will receive their entire deposit amount through the DICGC. As of March 31, 2026, the DICGC has already paid around ₹26.72 crore to the bank’s customers as insured deposits.
In recent years, the RBI has been increasingly strict with financially weak urban cooperative banks. The central bank’s focus is on protecting depositors’ interests and ensuring better governance in banks.
Earlier in April, the central bank revoked the license of Paytm Payments Bank Limited, stating that the bank had not complied with essential regulations related to its license. The RBI made it clear that the bank would no longer be able to provide any banking services and would apply to the High Court for winding up. However, the central bank assured that the bank had sufficient liquidity to return all customer deposits.
My name is Himanshu Tiwari. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including TECHNOLOGY, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
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