RBI Revokes Licence of Struggling Shirpur Co-operative Bank

The Reserve Bank of India has cancelled the licence of The Shirpur Merchants' Co-operative Bank due to inadequate capital and poor earning prospects. The bank is prohibited from banking operations starting April 6, 2026. Depositors are to receive insurance on deposits up to Rs 5 lakh from DICGC.

The Reserve Bank of India (RBI) announced on Monday that it has revoked the licence of The Shirpur Merchants' Co-operative Bank, citing insufficient capital and lack of viable earning prospects as key reasons.

Effective from the close of business on April 6, 2026, the bank will cease all banking operations, affirming RBI's stance in a recent statement. The Maharashtra Commissioner for Cooperation and the Registrar of Cooperative Societies are in the process of initiating the bank's winding up, alongside appointing a liquidator.

Depositors will receive insurance payouts up to Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC). According to the co-operative's records, 99.7% of depositors qualify for full reimbursement through DICGC. To date, Rs 48.95 crore has been disbursed based on depositor willingness. The RBI stressed that the bank's ongoing operations would jeopardize depositor interests.

(With inputs from agencies.)