In yet another blow to the urban cooperative banking sector, the Reserve Bank of India (RBI) has cancelled the licence of Yashwant Co-operative Bank Ltd. with effect from the close of business on May 19, 2026, citing poor financial health, inadequate capital and serious regulatory violations.
The Maharashtra-based Urban Cooperative Bank (UCB) has been prohibited from carrying out banking operations, including acceptance and repayment of deposits.
RBI said the continuance of the bank would be prejudicial to the interests of depositors and against public interest. The Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra, has been asked to initiate winding-up proceedings and appoint a liquidator.
Separately, the bank had earlier come under scrutiny over alleged financial irregularities. In a related case, former Maharashtra State Cooperative Council Chairman and BJP leader Shekhar Charegaonkar was arrested in connection with an alleged Rs 112 crore scam linked to the Phaltan-based cooperative bank.
The Yashwant Co-operative Bank matter had first drawn wider political attention in May last year when BJP MP Medha Vishram Kulkarni met Union Home and Cooperation Minister Amit Shah, raising concerns over alleged administrative and financial irregularities in the bank and seeking protection for depositors’ money.
Meanwhile, RBI said depositors would receive insurance cover through the Deposit Insurance and Credit Guarantee Corporation (DICGC). Around 99.02 per cent depositors are eligible to receive their full deposits up to the insured limit of Rs 5 lakh. DICGC has already disbursed Rs 106.96 crore to eligible depositors as of April 20, 2026.
The latest cancellation adds to growing concerns surrounding governance, financial discipline and depositor protection in the urban cooperative banking sector.
