The Reserve Bank has cancelled the license of a major cooperative bank. This is the Shirpur Merchants Cooperative Bank. The central bank stated that allowing the bank to continue operations would be detrimental to the interests of its depositors.
Add informalnewz.com as a Preferred Source
Bank License Cancelled: The Reserve Bank of India has cancelled the license of a major cooperative bank. This is the Shirpur Merchants Co-operative Bank. The reason for the RBI’s action is that the bank lacks adequate capital and prospects for earning profits. In a statement, the RBI stated that the bank will cease banking operations effective from the close of business on April 6, 2026. The Commissioner for Cooperation and Registrar of Cooperative Societies has been requested to issue an order for the winding up of the bank and to appoint a liquidator. Upon liquidation, every depositor will be entitled to receive a deposit insurance claim amount of up to ₹5 lakh on their deposits from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
How Much Will Depositors Receive?
The central bank stated that, according to data from the cooperative bank, approximately 99.7 percent of depositors are entitled to receive the full amount of their deposits from the DICGC. As of January 31, 2026, the DICGC has already disbursed ₹48.95 crore out of the total insured deposits, based on the consent of the respective depositors.
Providing detailed information regarding the cancellation of the license, the RBI stated that the bank lacks adequate capital and prospects for earning profits, and due to its current financial position, it would be unable to make full payments to its current depositors.
No Impact on Customers
The central bank stated that allowing the bank to continue its operations would be detrimental to the interests of its depositors. As a consequence of the license cancellation, the Shirpur Merchants Co-operative Bank has been prohibited from conducting banking business—including the acceptance of deposits and the repayment of deposited funds—with immediate effect.
RBI Meeting Begins
This action comes at a time when the three-day meeting of the Reserve Bank’s Monetary Policy Committee (MPC), convened to deliberate on the bi-monthly monetary policy, commenced on Monday. This marks the first bi-monthly monetary policy review meeting of the current financial year. The meeting is taking place amidst expectations that the policy rate is likely to be kept unchanged, given the apprehensions regarding rising inflation stemming from the crisis in West Asia.
The decision of the six-member Monetary Policy Committee (MPC), chaired by Reserve Bank Governor Sanjay Malhotra, will be announced on Wednesday. It is worth noting that the RBI has cumulatively reduced the policy repo rate by 1.25 percent since February 2025. This marks the largest reduction since 2019. The RBI last cut the repo rate by 0.25 percent in December of last year. In the previous meeting held in February, the status quo was maintained.
