Bank License Cancelled: RBI Shuts Down This Co-operative Bank, What’s Next?

The RBI has now cancelled the license of a co-operative bank in Maharashtra. Thus, the bank is officially closed forever. The name of the bank is Shirpur Merchants Co-operative Bank.

In its ongoing actions against cooperative banks, the Reserve Bank of India (RBI) has also revoked the license of this bank too. The same step was taken by the RBI in 2025.

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The central bank made this decision because Shirpur Merchants Co-operative Bank lacks adequate capital and income potential. Due to the license revocation, Shirpur Merchants Co-operative Bank will cease operations at the conclusion of business on April 6, 2026, the RBI stated in a statement on Monday. Therefore, the bank is now permanently closed.

The Registrar of Cooperative Societies, Maharashtra, who is also the Commissioner for Cooperation, has been asked to order the bank’s closure and name a liquidator.

Now, the question is, what’s next? What will happen to the money of the bank customers? When a bank is liquidated, the Deposit Insurance and Credit Guarantee Corporation (DICGC) will pay each client who has money in that bank the deposit insurance sum, which may be up to Rs. 5,00,000 on their deposits, as per the reports.

As of January 31, 2026, the DICGC has already distributed Rs. 48.95 crore of the entire insured deposits in accordance with the consent of the individual depositors. According to statistics from co-operative banks, approximately 99.7% of depositors are eligible to get the entire amount of their deposits from the Deposit Insurance and Credit Guarantee Corporation, according to the Reserve Bank of India.