Mumbai, April 6 The RBI said on Monday that it has cancelled the license of The Shirpur Merchants' Co-operative Bank because the lender does not have adequate capital and earning prospects.
Consequently, the bank ceases to carry on banking business, effective April 6, 2026, the Reserve Bank said in a statement.
The Commissioner for Cooperation, Registrar of Cooperative Societies, Maharashtra has also been requested to issue an order for winding up the bank and appoint a liquidator.
Upon liquidation, every depositor would be entitled to receive deposit insurance claim amount of their deposits up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
The RBI said that according to the data submitted by the co-operative bank, about 99.7 per cent of the depositors are entitled to receive the full amount of their deposits from DICGC.
As of January 31, 2026, DICGC has already paid Rs 48.95 crore of the total insured deposits based on the willingness received from the concerned depositors.
Giving details about the cancellation of the license, the RBI said that the lender does not have adequate capital and earning prospects, and with its present financial position, it would be unable to pay its depositors in full.
"The continuation of the bank would be prejudicial to the interests of its depositors," the central bank said.
Consequently, after the cancellation of its license, The Shirpur Merchants' Co-operative Bank is prohibited from conducting the business of banking, which includes, among other things, accepting deposits and repaying deposits, with immediate effect, it said.