RBI Cancels Licence of Shirpur Merchants' Co-operative Bank

RBI Press Releases

Filed April 6th, 2026

Detected April 7th, 2026

Summary

The Reserve Bank of India cancelled the licence of The Shirpur Merchants' Co-operative Bank Ltd., Shirpur effective April 6, 2026, under Section 22 read with Section 56 of the Banking Regulation Act, 1949. The bank ceases all banking business operations due to inadequate capital, non-compliance with statutory requirements, and inability to protect depositor interests. DICGC has already paid ₹48.95 crore to eligible depositors, with 99.7% of depositors entitled to full coverage up to ₹5 lakh.

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What changed

RBI cancelled the banking licence of The Shirpur Merchants' Co-operative Bank Ltd. citing violations of Sections 11(1) and 22(3) of the Banking Regulation Act, 1949, including inadequate capital, non-compliance with statutory requirements, and prejudice to depositor interests. The bank is prohibited from conducting any banking business including acceptance and repayment of deposits.

Co-operative banks should review their capital adequacy, earning prospects, and compliance with all BR Act requirements to avoid similar enforcement action. Depositors of the affected bank should file claims with DICGC for deposit insurance coverage up to ₹5 lakh within prescribed timelines.

What to do next

Notify affected depositors of licence cancellation and DICGC claims process
Cooperate with appointed liquidator for wind-up proceedings
Review compliance requirements for other co-operative banks under BR Act provisions

Penalties

Deposit insurance claims limited to ₹5,00,000 per depositor through DICGC; approximately 0.3% of depositors may receive less than full deposit amounts.

Source document (simplified)

Press Releases

| () | |
| Date : Apr 06, 2026 | |
| RBI cancels the licence of The Shirpur Merchants’ Co-operative Bank Ltd., Shirpur | |
| | |
| The Reserve Bank of India (RBI), vide order dated April 02, 2026, 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). Consequently, the bank ceases to carry on banking business, with effect from the close of business on April 06, 2026. 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 for the bank.

The Reserve Bank cancelled the licence of the bank as:

1. The bank does not have adequate capital and earning prospects. As such, it does not comply with the provisions of Section 11(1) and Section 22 (3) (d) read with Section 56 of the Banking Regulation Act, 1949.
2. The bank has failed to comply with the requirements of Sections 22 (3) (a), 22 (3) (b), 22(3)(c), 22(3) (d) and 22(3)(e) read with Section 56 of the Banking Regulation Act, 1949.
3. The continuance of the bank will be prejudicial to the interests of its depositors.
4. The bank with its present financial position would be unable to pay its present depositors in full; and
5. Public interest would be adversely affected if the bank is allowed to carry on its banking business any further.

Consequent to the cancellation of its licence, “The Shirpur Merchants’ Co-operative Bank Ltd. Shirpur” is prohibited from conducting the business of ‘banking’ which includes, among other things, acceptance of deposits and repayment of deposits as defined in Section 5(b) read with Section 56 of the Banking Regulation Act, 1949, with immediate effect.
On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of ₹5,00,000/- (Rupees five lakh only) from Deposit Insurance and Credit Guarantee Corporation (DICGC), subject to the provisions of DICGC Act, 1961. As per the data submitted by the bank, about 99.7% of the depositors are entitled to receive full amount of their deposits from DICGC. As on January 31, 2026, DICGC has already paid ₹48.95 crore of the total insured deposits under the provisions of Section 18A of the DICGC Act, 1961, based on the willingness received from the concerned depositors of the bank.

(Brij Raj)
Chief General Manager

Press Release: 2026-2027/26 | | The Reserve Bank of India (RBI), vide order dated April 02, 2026, 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). Consequently, the bank ceases to carry on banking business, with effect from the close of business on April 06, 2026. 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 for the bank.

The Reserve Bank cancelled the licence of the bank as:

The bank does not have adequate capital and earning prospects. As such, it does not comply with the provisions of Section 11(1) and Section 22 (3) (d) read with Section 56 of the Banking Regulation Act, 1949.
The bank has failed to comply with the requirements of Sections 22 (3) (a), 22 (3) (b), 22(3)(c), 22(3) (d) and 22(3)(e) read with Section 56 of the Banking Regulation Act, 1949.
The continuance of the bank will be prejudicial to the interests of its depositors.
The bank with its present financial position would be unable to pay its present depositors in full; and
Public interest would be adversely affected if the bank is allowed to carry on its banking business any further.
1. Consequent to the cancellation of its licence, “The Shirpur Merchants’ Co-operative Bank Ltd. Shirpur” is prohibited from conducting the business of ‘banking’ which includes, among other things, acceptance of deposits and repayment of deposits as defined in Section 5(b) read with Section 56 of the Banking Regulation Act, 1949, with immediate effect.
2. On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of ₹5,00,000/- (Rupees five lakh only) from Deposit Insurance and Credit Guarantee Corporation (DICGC), subject to the provisions of DICGC Act, 1961. As per the data submitted by the bank, about 99.7% of the depositors are entitled to receive full amount of their deposits from DICGC. As on January 31, 2026, DICGC has already paid ₹48.95 crore of the total insured deposits under the provisions of Section 18A of the DICGC Act, 1961, based on the willingness received from the concerned depositors of the bank.

(Brij Raj)
Chief General Manager

Press Release: 2026-2027/26 |
| | |
| The Reserve Bank of India (RBI), vide order dated April 02, 2026, 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). Consequently, the bank ceases to carry on banking business, with effect from the close of business on April 06, 2026. 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 for the bank.

The Reserve Bank cancelled the licence of the bank as:

The bank does not have adequate capital and earning prospects. As such, it does not comply with the provisions of Section 11(1) and Section 22 (3) (d) read with Section 56 of the Banking Regulation Act, 1949.
The bank has failed to comply with the requirements of Sections 22 (3) (a), 22 (3) (b), 22(3)(c), 22(3) (d) and 22(3)(e) read with Section 56 of the Banking Regulation Act, 1949.
The continuance of the bank will be prejudicial to the interests of its depositors.
The bank with its present financial position would be unable to pay its present depositors in full; and
Public interest would be adversely affected if the bank is allowed to carry on its banking business any further.
1. Consequent to the cancellation of its licence, “The Shirpur Merchants’ Co-operative Bank Ltd. Shirpur” is prohibited from conducting the business of ‘banking’ which includes, among other things, acceptance of deposits and repayment of deposits as defined in Section 5(b) read with Section 56 of the Banking Regulation Act, 1949, with immediate effect.
2. On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to a monetary ceiling of ₹5,00,000/- (Rupees five lakh only) from Deposit Insurance and Credit Guarantee Corporation (DICGC), subject to the provisions of DICGC Act, 1961. As per the data submitted by the bank, about 99.7% of the depositors are entitled to receive full amount of their deposits from DICGC. As on January 31, 2026, DICGC has already paid ₹48.95 crore of the total insured deposits under the provisions of Section 18A of the DICGC Act, 1961, based on the willingness received from the concerned depositors of the bank.

(Brij Raj)
Chief General Manager

Press Release: 2026-2027/26 | |