RBI Cancels Licence of Yashwant Co-operative Bank Over Lack of Capital and Earning Prospects

The Reserve Bank of India has cancelled the banking licence of The Yashwant Co-operative Bank Ltd., located in Phaltan, Maharashtra. The lender must stop all banking operations immediately after the close of business on Tuesday.

Customers will no longer be able to deposit or withdraw money from the bank. The banking regulator issued the official closure order on Monday, May 18, 2026. The cooperative lender was financially too weak to survive. According to official statements, the bank does not have adequate capital and earning prospects. It failed to comply with basic safety and stability norms.

Protection For Depositors

The banking regulator emphasised that letting the bank operate would harm public interest. The present financial condition of the lender makes it impossible to pay its current depositors in full. The bank is now strictly prohibited from conducting any banking business. This restriction includes accepting fresh deposits and repaying existing accounts.

The Maharashtra Commissioner for Cooperation and Registrar of Cooperative Societies will now wind up the lender. Officials will appoint a liquidator to manage the bank's remaining assets and clear outstanding claims.

What Should Customers Do? 

The central bank assured regular account holders that their hard-earned money remains protected under safety nets. Deposits are insured by the Deposit Insurance and Credit Guarantee Corporation. Every depositor is legally entitled to receive a monetary repayment of up to ₹5 lakh. This limit follows the standard insurance cover policy applicable to all commercial and cooperative bank customers across India.

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