The Reserve Bank of India (RBI) has revoked the banking licence of Yashwant Co-operative Bank, Phaltan, Maharashtra, after determining that the lender lacked sufficient capital and viable earning prospects to continue operations, as per the PTI news reports.
The banking regulator has also requested the Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra, to initiate the bank’s winding-up process and appoint a liquidator. Following the cancellation, the bank ceased carrying out banking activities from the close of business on May 19, 2026.
According to the RBI, the co-operative bank failed to meet certain regulatory requirements prescribed under the Banking Regulation Act.
The regulator stated that the institution’s financial condition had deteriorated to a point where it would not be able to fully meet its obligations towards depositors.
The central bank further noted that allowing the lender to continue operations would not be in the interest of depositors and could adversely affect public confidence in the banking system.
The decision forms part of RBI’s supervisory framework aimed at protecting depositors and maintaining stability within the co-operative banking sector.
Following liquidation, eligible depositors will be entitled to receive insurance claims of up to ₹5 lakh through the Deposit Insurance and Credit Guarantee Corporation (DICGC).
Based on data submitted by the bank, around 99% of depositors are expected to receive their entire deposit amount under the deposit insurance mechanism.
RBI also stated that DICGC had already disbursed approximately ₹106.96 crore to eligible depositors as of April 20, 2026.
The deposit insurance framework is designed to provide financial protection to depositors in the event of bank failures and minimise disruption for retail customers.
Read More: RBI Decides Against Extra Capital Buffer for Banks!
The cancellation of Yashwant Co-operative Bank’s licence highlights RBI’s continued focus on depositor protection and regulatory compliance, while the deposit insurance mechanism is expected to safeguard the interests of the vast majority of affected customers.
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Published on: May 20, 2026, 8:50 AM IST
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