RBI Cancels Licence of Sarvodaya Co-operative Bank: Here’s Why
New Delhi, May 19: The Reserve Bank of India has cancelled the licence of Sarvodaya Co-operative Bank after finding serious regulatory non-compliance. The bank has been barred from conducting any banking operations, and authorities have initiated the winding-up process to protect depositors’ interests.
Why RBI Cancelled the Licence
The RBI stated that Sarvodaya Co-operative Bank failed to meet key requirements under the Banking Regulation Act, including maintaining adequate capital and ensuring viable earnings prospects. Continued non-compliance led to the central bank’s decision to revoke its licence.
Banking Operations Stopped Immediately
Following the cancellation, the bank has been prohibited from accepting deposits or carrying out any banking activities. The Reserve Bank has also directed authorities to begin the process of winding up the institution and appoint a liquidator.
Deposit Insurance Protection for Customers
Most depositors are protected under the Deposit Insurance and Credit Guarantee Corporation (DICGC) scheme, which insures deposits up to ₹5 lakh per customer.
According to official data, a large majority of depositors are eligible to receive full refunds under this insurance coverage.
What Customers Should Do Next
Depositors are advised to:
- Check eligibility for insured claims
- Submit required documentation to DICGC
- Follow updates from the liquidation authority
- Track refund status through official channels
Authorities have already begun partial payouts to eligible depositors.
