The Reserve Bank of India (RBI) has cancelled the licence of the Shirpur Merchants’ Co-operative Bank Ltd., Shirpur, through an order dated April 2, 2026. With this action, the bank has ceased to carry on banking business from the close of business on April 6, 2026.
The RBI has also requested the Commissioner for Cooperation and Registrar of Cooperative Societies, Maharashtra, to initiate winding-up proceedings and appoint a liquidator for the bank.
The central bank took this step after finding that the bank does not have adequate capital and viable earning prospects, thereby failing to comply with key provisions of the Banking Regulation Act, 1949.
The RBI further noted that the bank has not adhered to multiple regulatory requirements and its continued operations would be prejudicial to the interests of its depositors. Given its current financial position, the bank would be unable to repay its depositors in full, and allowing it to function any further would adversely impact public interest.
Following the cancellation of its licence, the bank has been prohibited from conducting any banking activities, including acceptance and repayment of deposits, with immediate effect. This effectively brings an end to all its operations as a banking institution.
Meanwhile, depositors have been provided significant relief through the Deposit Insurance and Credit Guarantee Corporation (DICGC).
Upon liquidation, every depositor will be entitled to receive deposit insurance of up to Rs 5 lakh, subject to the provisions of the DICGC Act, 1961. As per the data submitted by the bank, about 99.7% of the depositors are expected to receive their full deposits under the insurance cover.
Notably, as of January 31, 2026, the DICGC has already disbursed Rs 48.95 crore towards insured deposits based on the willingness received from depositors. The RBI’s action once again highlights its commitment to safeguarding depositor interests and maintaining stability in the cooperative banking sector.
