RBI Revokes License of Shirpur Merchants' Co-operative Bank Amid Financial Instability
RBI cancels licence of Shirpur Merchants' Co-operative Bank
The Economic Times
Image: The Economic Times
The Reserve Bank of India (RBI) has revoked the license of The Shirpur Merchants' Co-operative Bank due to inadequate capital and earning prospects, effective April 6, 2026. Nearly 99.7% of depositors will receive insurance claims up to ₹5 lakh (approximately $6,000 USD) from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
- 01RBI cancelled the bank's license due to financial instability.
- 02Effective April 6, 2026, the bank cannot conduct any banking business.
- 03Depositors are entitled to insurance claims up to ₹5 lakh (approximately $6,000 USD).
- 0499.7% of depositors will receive full insurance coverage from DICGC.
- 05The bank's financial position was deemed prejudicial to depositors' interests.
Advertisement
In-Article Ad
The Reserve Bank of India (RBI) announced the cancellation of The Shirpur Merchants' Co-operative Bank's license due to insufficient capital and earning potential. This decision takes effect from the close of business on April 6, 2026, prohibiting the bank from engaging in any banking operations, including accepting or repaying deposits. The RBI's assessment indicated that the bank's financial condition would prevent it from fulfilling its obligations to depositors, which could harm their interests. As a result, the Commissioner for Cooperation in Maharashtra has been asked to initiate the bank's winding up and appoint a liquidator. The Deposit Insurance and Credit Guarantee Corporation (DICGC) will provide insurance claims to depositors, ensuring that approximately 99.7% of them will receive full compensation for their deposits, up to a limit of ₹5 lakh (roughly $6,000 USD). As of January 31, 2026, the DICGC has already disbursed ₹48.95 crore (approximately $5.9 million USD) of insured deposits based on depositor requests.
Advertisement
In-Article Ad
This closure affects depositors who may face delays in accessing their funds, although most will be compensated through insurance.
Advertisement
In-Article Ad
Reader Poll
Do you think the government should provide more support to struggling banks?
Connecting to poll...
More about Reserve Bank of India
RBI Unveils New Guidelines for Business Correspondents and Branch Authorisation
Business Standard • Apr 6, 2026
RBI Maintains Credit Default Swap Cap at 5% and Sets ₹3.3 Trillion Limit for FY27
Business Standard • Apr 6, 2026
RBI Overhauls Business Correspondent Model to Enhance Financial Services Delivery
The Economic Times • Apr 6, 2026
Read the original article
Visit the source for the complete story.