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Reserve Bank Shuts Down The Yashwant Co-operative Bank Over Financial Weakness
RBI: The Reserve Bank of India has cancelled the license of The Yashwant Co-operative Bank of Maharashtra. This decision was taken due to the bank's lack of adequate capital and earning prospects. Depositors will receive an insurance cover of up to ₹5 lakh.
The Reserve Bank of India has revoked the banking license of The Yashwant Co-operative Bank located at Phaltan, Maharashtra due to lack of capital and poor earnings. This was done as the order came into effect after business hours on May 19, 2026.
The RBI stated that the bank failed to comply with certain requirements of the Banking Regulation Act. Due to the financial state of affairs, the bank was unable to repay all the depositors. The central bank further mentioned that allowing the bank to continue its operations will affect depositors.
An order was issued by the Maharashtra Cooperative Commissioner and Registrar of Cooperative Societies to wind up the bank. Additionally, a demand has been made to appoint a liquidator for the bank. Upon liquidation, each depositor will be entitled to receive a deposit insurance claim amount of up to ₹5 lakh of their deposit. According to data submitted by the bank, approximately 99.02% of depositors were entitled to receive their full deposits. The Deposit Insurance and Credit Guarantee Corporation has already paid out ₹106.96 crore by April 20, 2026.
The Reserve Bank clarified that the bank lacked sufficient capital. Its earnings prospects were also unsatisfactory. The bank was violating several provisions of the Banking Regulation Act. The central bank stated that these deficiencies made it impossible for the bank to continue operating.
