The Reserve Bank of India took action on Monday by revoking the license of Shirpur Merchants’ Co-operative Bank due to insufficient capital and poor financial prospects. This decision effectively marks the end of the bank’s operations. The central bank stated that the bank’s financial condition does not allow it to fully repay depositors, posing a risk to their interests.
Following the cancellation, the RBI has directed the Commissioner for Cooperation and Registrar of Cooperative Societies in Maharashtra to start the bank winding-up process and appoint a liquidator. Depositors have been assured by the RBI that their funds are largely secure under the deposit insurance scheme, with each depositor eligible for insurance coverage of up to Rs 5 lakh on their deposits.
The Deposit Insurance and Credit Guarantee Corporation rules indicate that nearly all depositors, around 99.7%, are expected to receive their full eligible amount. As of January 31, 2026, the DICGC has already disbursed Rs 48.95 crore to depositors who filed claims. With the license cancellation, the bank is prohibited from conducting any banking operations, including accepting deposits or repaying funds, effective immediately.
The RBI emphasized that allowing the bank to continue operating would be detrimental to the depositors’ interests, leading to the decision to cease its banking activities.
