RBI Cancels Licence of The Yashwant Co-operative Bank Ltd Over Financial Instability
Effective May 19, 2026, the RBI cancelled the licence of Phaltan’s Yashwant Co-operative Bank due to insufficient capital and failure to meet regulatory standards. The bank is now prohibited from all banking activities, with liquidation proceedings set to follow. RBI cancels the licence of The Yashwant Co The Reserve Bank of India (RBI), vide order dated May 18, 2026, has cancelled the licence of “The Yashwant Co-operative Bank Ltd., Phaltan”, under Section 22 read with.
Citing a failure to meet the capital requirements under Section 11(1) and Section 22(3) of the Banking Regulation Act, 1949, the RBI has formally ordered the closure of The Yashwant Co-operative Bank Ltd., Phaltan. The regulator determined that the bank’s financial state left it unable to pay depositors in full and deemed its continued operation harmful to the public interest.
The Registrar of Cooperative Societies in Maharashtra has been directed to initiate liquidation and appoint a liquidator to oversee the process. Under current regulations, 99.02% of the bank's depositors are eligible for full insurance coverage. The Deposit Insurance and Credit Guarantee Corporation (DICGC) has already paid out ₹106.96 crore as of April 20, 2026, to eligible depositors who expressed willingness to receive the funds.
- Operational Ban: Effective at the close of business on May 19, 2026, the bank is barred from conducting banking business, including accepting or repaying deposits.
- Insurance Payouts: Claimants are entitled to receive up to ₹5,00,000 from the DICGC.
- Regulatory Grounds: The bank violated multiple sub-sections of Section 22 of the Banking Regulation Act, 1949.
Glossary
Section 22 of BR Act: The provision empowering the RBI to grant or revoke banking licences.
DICGC: A subsidiary of the RBI that acts as a safety net, providing insurance coverage for deposits up to a fixed monetary ceiling.
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