**Executive Summary**
The Reserve Bank of India (RBI) has cancelled the license of "Indian Mercantile Co-operative Bank Ltd., Lucknow" effective February 13, 2026, due to non-compliance with regulatory requirements and concerns about depositor interests. The Commissioner and Registrar of Cooperatives, Uttar Pradesh, has been requested to wind up the bank and appoint a liquidator. Depositors are entitled to receive deposit insurance claims up to ₹5,00,000 from DICGC upon liquidation.
**Key Points / Main Content**
* **License Cancellation:**
* RBI cancelled the bank's license under Section 22 read with Section 56 of the Banking Regulation Act, 1949.
* The bank ceases to conduct banking business as of February 13, 2026.
* **Reasons for Cancellation:**
* Inadequate earning prospects, not complying with Section 22 (3) (d) read with Section 56 of the Banking Regulation Act, 1949.
* Failure to comply with Sections 22 (3) (b), 22(3)(c), 22(3) (d) and 22(3)(e) read with Section 56 of the Banking Regulation Act, 1949.
* Continuation of the bank is prejudicial to depositors' interests and the public interest.
* **Restrictions on Bank:**
* The bank is prohibited from conducting banking business, including accepting or repaying deposits, as defined in Section 5(b) read with Section 56 of the Banking Regulation Act, 1949.
* **Deposit Insurance:**
* Each depositor is entitled to receive deposit insurance claim amount up to ₹5,00,000 from DICGC, subject to the DICGC Act, 1961.
* Approximately 98.75% of depositors are expected to receive their full deposit amount from DICGC.
* DICGC has already paid ₹2.90 crore of total insured deposits as of December 31, 2025, under Section 18A of the DICGC Act, 1961.
**Impact Analysis**
**Indian Mercantile Co-operative Bank Ltd., Lucknow**
* **Impact:**
* Ceases all banking operations, including accepting deposits and repaying depositors.
* **Action Required:**
* Must cooperate with the appointed liquidator.
**Depositors of Indian Mercantile Co-operative Bank Ltd., Lucknow**
* **Impact:**
* Bank operations cease to operate on February 13, 2026, limiting access to banking services through this institution.
* Entitled to receive deposit insurance claims up to ₹5,00,000 from DICGC.
* **Action Required:**
* File claims with DICGC to recover insured deposits up to the limit.
**Commissioner and Registrar of Cooperative, Uttar Pradesh**
* **Impact:**
* Required to oversee the winding up of the bank.
* **Action Required:**
* Issue an order for winding up the bank.
* Appoint a liquidator for the bank.
Key Entities Referenced
Reserve Bank of India (RBI): The central bank of India, responsible for cancelling the bank's license.
Indian Mercantile Co-operative Bank Ltd., Lucknow: The bank whose license was cancelled.
Banking Regulation Act, 1949: The Act under which the bank's license was cancelled.
Deposit Insurance and Credit Guarantee Corporation (DICGC): Corporation providing deposit insurance to the depositors of the bank.
DICGC Act, 1961: The Act governing the Deposit Insurance and Credit Guarantee Corporation.
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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