Licence Revoked: Sarvodaya Co-operative Bank's Operations Halted

The Reserve Bank announced on Tuesday that it has cancelled the licence of Sarvodaya Co-operative Bank. The decision was made due to the bank's inadequate capital and lack of earning prospects, forcing it to stop banking operations at the close of business on May 12, 2026.

Following this action, the Commissioner for Cooperation and Registrar of Cooperative Societies in Maharashtra has been instructed to issue an order for the bank's winding up and to appoint a liquidator. Depositors will be able to claim insurance amounts of up to Rs 5 lakh through the Deposit Insurance and Credit Guarantee Corporation (DICGC).

According to the data from the bank, approximately 98.36% of depositors are eligible to recover their full deposits through DICGC measures. As of March 31, 2026, DICGC has already disbursed Rs 26.72 crore in insured deposits. The RBI cited the bank's inability to fulfill depositor demands and ongoing regulatory non-compliance as reasons for licence cancellation, emphasizing a potential threat to public interest if operations continued.

(With inputs from agencies.)