RBI Cancels License of The Shirpur Merchants Co-operative Bank

• Manish Kumar
• 07 Apr 2026
• 81 Views

The Reserve Bank of India (RBI) recently exercised its power under the Banking Regulation Act, 1949, and revoked the license of Shirpur Merchants Cooperative Bank. The Central Bank was rather compelled to take this serious step against Shirpur Merchants Cooperative Bank due to the cooperative bank’s insufficient capital as well as poor earning prospects. In a statement released on 6 April 2026, the RBI had announced that as a result of cancellation of the bank's license, Shirpur Merchants Co-operative Bank will cease to conduct all the banking operations at the closure of business on 6 April 2026. 

The Commissioner for Cooperation, Registrar of Cooperative Societies, Maharashtra, has been asked by the RBI to issue an order pertaining to the cooperative bank's liquidation and to appoint a liquidator who can take care of the process. Upon liquidation of the cooperative bank, every customer with funds in the bank is entitled to receive up to an amount of Rs 5,00,000 in deposit insurance from Deposit Insurance and Credit Guarantee Corporation (DICGC). 

The RBI stated that according to co-operative bank data, approximately 99.7 percent of depositors are eligible to receive the full amount of their deposits from DICGC. As of 31 January 2026, the DICGC has already paid out Rs 48.95 crore of the total insured deposits after the consent of respective depositors.

Why did RBI cancel Shirpur Merchant Cooperative Bank’s License?

The Central Bank announced the cancellation of the license for Shirpur Merchants Co-operative Bank, citing that the bank lacks adequate capital and profit potential. Due to its current financial situation, the bank is unable to make full payments to its existing customers. The RBI further said that if the cooperative bank continues operations, the same will be detrimental to the customers’ interests. 

Due to the cancellation of the licence, the Shirpur Merchants Cooperative Bank is no longer permitted to continue banking operations under the Banking Regulation Act, 1949, including the acceptance or payment of deposits, effective immediately. 

Source: India TV News