The Reserve Bank of India (RBI) has canceled the license of Sarvodaya Co-operative Bank in Mumbai due to significant failures in adhering to banking regulations. Effective May 12, 2026, the bank is prohibited from continuing its banking operations, which includes accepting or repaying deposits. The RBI has also instructed the Commissioner for Cooperation and Registrar of Cooperative Societies to initiate the winding-up process and appoint a liquidator. Major factors leading to this decision include inadequate capital and poor earning prospects. For depositors, the RBI has stated that they can claim deposit insurance of up to ₹5 lakh (approximately $6,000 USD) from the Deposit Insurance and Credit Guarantee Corporation (DICGC). As of the last report, about 98.36% of depositors are eligible to recover the full amount of their deposits, and the DICGC has already paid out ₹26.72 crore (approximately $3.2 million USD) in claims.