Mumbai, April 6 (IANS) The Reserve Bank of India on Monday cancelled the licence of Shirpur Merchants’ Co-operative Bank, citing inadequate capital and poor earning prospects, effectively bringing an end to its banking operations.

In a statement, the central bank said the lender will cease all banking activities from the close of business on April 6, 2026.

The RBI added that the bank’s current financial position makes it unable to fully repay its depositors and allowing it to continue operations would be detrimental to their interests.

“The Reserve Bank of India has cancelled the licence of The Shirpur Merchants’ Co-operative Bank Ltd., Shirpur, under Section 22 read with Section 56 of the Banking Regulation Act, 1949 (BR Act),” the central bank said.

“Consequently, the bank ceases to carry on banking business, with effect from the close of business on April 06, 2026,” it added.

Following the cancellation, the RBI has asked the Commissioner for Cooperation and Registrar of Cooperative Societies in Maharashtra to initiate the process of winding up the bank and appoint a liquidator.

The RBI assured depositors that their money remains largely safe under the deposit insurance scheme.

Under the rules of the Deposit Insurance and Credit Guarantee Corporation, each depositor is eligible to receive up to Rs 5 lakh as insurance on their deposits.

According to the data submitted by the bank, around 99.7 per cent of depositors are expected to receive their full eligible amount under this scheme.

The RBI also noted that as of January 31, 2026, DICGC has already paid Rs 48.95 crore to depositors who had submitted their claims.

With the licence now cancelled, the bank is barred from carrying out any banking activities, including accepting deposits or repaying funds, with immediate effect.

“The continuance of the bank will be prejudicial to the interests of its depositors,” the central bank stated.

–IANS

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