The Reserve Bank of India (RBI) has cancelled the license of Shirpur Merchants Cooperative Bank due to insufficient capital and poor profit prospects.
The bank will stop all services from the close of business on April 6, 2026.
The Cooperative Commissioner and Registrar of Cooperative Societies will now begin the process of winding up the bank and appoint a liquidator.
Once this is done, depositors will receive insurance up to ₹5 lakh per account from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
What Depositors Will Get
According to RBI, 99.7% of depositors are eligible to receive the full insured amount.
The DICGC has already disbursed ₹48.95 crore of insured deposits as of January 31, 2026, with consent from the depositors.
RBI clarified that due to the bank’s current financial state, it cannot pay depositors in full.
Continuing operations would have been harmful to the interests of its customers.
Banking Services and Customer Safety
With the license cancellation, Shirpur Merchants Co-operative Bank is barred from conducting any banking business, including accepting and paying deposits, with immediate effect.
RBI reassures that customers will not be adversely affected since most depositors are protected under deposit insurance.
RBI’s Monetary Policy Meeting
This decision comes as the RBI’s Monetary Policy Committee (MPC) starts its three-day meeting, the first of this fiscal year.
The MPC, led by RBI Governor Sanjay Malhotra, is expected to keep the policy rate unchanged amid inflation concerns linked to the West Asia crisis.
Since February 2025, RBI has cut the repo rate by 1.25%, marking the largest reduction since 2019.
The last cut was 0.25% in December 2025, and the previous meeting in February maintained the status quo.
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