Mumbai: The Reserve Bank of India (RBI) announced on Tuesday that it has cancelled the licence of the Sarvodaya Co-operative Bank Ltd., Mumbai, with immediate effect, as the bank does not have adequate capital and earning prospects.
“Consequently, the bank ceases to carry on banking business, with effect from the close of business on May 12, 2026. The Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra, has also been requested to issue an order for winding up the bank and appointing a liquidator for the bank,” the RBI said in a statement.
On liquidation, every depositor would be entitled to receive the deposit insurance claim amount of his or her deposits up to a monetary ceiling of Rs 5,00,000 from the Deposit Insurance and Credit Guarantee Corporation (DICGC), subject to the provisions of DICGC Act, 196, the RBI statement said.
According to the data submitted by the bank, about 98.36 per cent of the depositors were entitled to receive the full amount of their deposits from DICGC as on date of imposition of all inclusive directions. As on March 31, 2026, the DICGC has already paid Rs 26.72 crore of the total insured deposits under the provisions of the DICGC Act, based on the willingness received from the depositors concerned of the bank.
The RBI said that Sarvodaya Co-operative Bank has failed to comply with the Banking Regulation Act and its continuance is prejudicial to the interests of its depositors.
The bank, with its present financial position, would be unable to pay its present depositors in full; and public interest would be adversely affected if the bank is allowed to carry on its banking business any further, the RBI statement said.
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 with immediate effect, it added.
(IANS)
