**Executive Summary**
The Reserve Bank of India (RBI) has cancelled the license of the Indian Mercantile Co-operative Bank Ltd., Lucknow, effective February 13, 2026. The bank can no longer conduct banking business. The Commissioner and Registrar of Cooperative, Uttar Pradesh has been requested to wind up the bank and appoint a liquidator.
**Key Points / Main Content**
* **License Cancellation:**
* RBI cancelled the license under Section 22 read with Section 56 of the Banking Regulation Act, 1949.
* The bank ceases to carry on banking business from February 13, 2026.
* Reasons for cancellation include inadequate earning prospects, non-compliance with banking regulations, and prejudice to depositors' interests.
* **Restrictions on the Bank:**
* "Indian Mercantile Co-operative Bank Ltd., Lucknow” is prohibited from conducting banking business, including accepting and repaying deposits.
* **Depositor Insurance:**
* On liquidation, each depositor is entitled to receive deposit insurance up to ₹5,00,000 from DICGC, subject to DICGC Act, 1961 provisions.
* Approximately 98.75% of the depositors are entitled to receive the full amount of their deposits from DICGC.
* As of December 31, 2025, DICGC has already paid ₹2.90 crore of the total insured deposits.
**Impact Analysis**
**Stakeholder: Indian Mercantile Co-operative Bank Ltd., Lucknow**
* **Impact**
* The bank is no longer authorized to conduct banking business.
* The bank's operations will cease.
* **Action Required**
* Cease all banking operations immediately.
**Stakeholder: Depositors**
* **Impact**
* Depositors will receive insurance claims up to ₹5,00,000 per depositor, through DICGC.
* **Action Required**
* Await communication regarding the liquidation process and insurance claim settlement.
**Stakeholder: Commissioner and Registrar of Cooperative, Uttar Pradesh**
* **Impact**
* Responsible for winding up the bank and appointing a liquidator.
* **Action Required**
* Issue an order for winding up the bank.
* Appoint a liquidator to manage the winding-up process.
Key Entities Referenced
Reserve Bank of India (RBI): Central bank of India, responsible for cancelling the licence of the bank.
Indian Mercantile Co-operative Bank Ltd., Lucknow: Bank whose license was cancelled.
Banking Regulation Act, 1949: Act under which the license of the bank was cancelled (specifically, Section 22 read with Section 56).
DICGC Act, 1961: Act governing the Deposit Insurance and Credit Guarantee Corporation (DICGC) and deposit insurance claims.
Deposit Insurance and Credit Guarantee Corporation (DICGC): Corporation providing deposit insurance to depositors.
प्रेस प्रकाशनी PRESS RELEASE
भारतीय �रज़व र् बकैं
RESERVE BANK OF INDIA
वेबसाइट : www.rbi.org.in/hindi संचार �वभाग, केंद्र�य कायार्लय, शह�द भगत �सहं माग,र् फोटर्, मुंबई - 400 001
Website : www.rbi.org.in Department of Communication, Central Office, Shahid Bhagat Singh Marg, Fort,
ई-मले /email : helpdoc@rbi.org.in Mumbai - 400 001 फोन/Phone: 022 - 2266 0502
February 13, 2026
RBI cancels the licence of Indian Mercantile Co-operative Bank Ltd., Lucknow
The Reserve Bank of India (RBI), vide order dated February 11, 2026, has cancelled
the licence of “Indian Mercantile Co-operative Bank Ltd., Lucknow”, 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
February 13, 2026. The Commissioner and Registrar of Cooperative, Uttar Pradesh 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:
i. The bank has inadequate earning prospects. As such, it does not comply with the
provisions of Section 22 (3) (d) read with Section 56 of the Banking Regulation Act,
1949.
ii. The bank has failed to comply with the requirements of Sections 22 (3) (b),
22(3)(c), 22(3) (d) and 22(3)(e) read with Section 56 of the Banking Regulation
Act, 1949.
iii. The continuance of the bank will be prejudicial to the interests of its depositors.
iv. Public interest would be adversely affected if the bank is allowed to carry on its
banking business any further.
2. Consequent to the cancellation of its licence, “Indian Mercantile Co-operative Bank
Ltd., Lucknow” 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.
3. 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 98.75% of
the depositors are entitled to receive full amount of their deposits from DICGC. As on
December 31, 2025, DICGC has already paid ₹2.90 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)
Press Release: 2025-2026/2118 Chief General Manager
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