The decision came into effect from the close of business on May 12, 2026, after which the bank is no longer permitted to carry out any banking operations, including accepting or repaying deposits.
RBI stated that the bank had failed to comply with key provisions of the Banking Regulation Act and its financial condition made it incapable of meeting obligations to depositors. The regulator said continuing its operations would be against public interest.
Following the cancellation, the Commissioner for Cooperation and Registrar of Co-operative Societies in Maharashtra has been directed to initiate the winding-up process and appoint a liquidator for the bank.
To safeguard customers, the Deposit Insurance and Credit Guarantee Corporation (DICGC) will provide insurance coverage of up to INR 5 lakh per depositor. This means eligible account holders will be able to recover their insured amount under the deposit insurance scheme.
Authorities have also indicated that a large majority of depositors fall within the insured limit, ensuring partial protection for most customers. The remaining claims, if any, will depend on the liquidation process and recovery of the bank’s assets.
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