The Reserve Bank of India has cancelled the licence of The Shirpur Merchants’ Co-operative Bank Ltd., effective from the close of business on April 6, 2026.

Following the cancellation, the bank is prohibited from conducting any banking activities, including acceptance and repayment of deposits. The authorities have also been directed to initiate winding-up proceedings and appoint a liquidator.

The RBI cited multiple reasons for the action, including:

Inadequate capital and poor earning prospects

Failure to comply with key regulatory requirements under the Banking Regulation Act, 1949

The bank’s continued operations being detrimental to depositors’ interests

Inability to fully repay depositors in its current financial condition

On the depositor front, relief comes through deposit insurance. Under the Deposit Insurance and Credit Guarantee Corporation (DICGC) scheme, depositors are eligible to receive up to Rs 5 lakh.

As per available data:

99.7% of depositors are expected to receive their full insured amount

Around Rs 48.95 crore has already been paid out by DICGC as of January 31, 2026

The RBI clarified that the decision was taken in public interest and to safeguard depositors.