Finance minister Nirmala Sitharaman, who faced angry depositors of scam-hit Punjab & Maharashtra Cooperative (PMC) Bank here on Thursday, announced the setting up of a panel to recommend legislative changes to ensure better governance at co-operative banks.

If necessary, the Centre will amend the laws governing co-operative banks in the winter session of Parliament, she said at a press conference.

Sitharaman hinted the panel might consider revising the deposit insurance cover of Rs 1 lakh, which has not been changed since 1993.

RBI governor Shaktikanta Das had ducked a specific question raised at his recent press conference on October 4 on a possible review of the 26-year-old limit.

Deputy governor N. S. Vishwanathan had said, “There has been this demand in the past as well, but on the extent of deposit insurance cover, there are many elements that get into it in terms of how much percentage of deposit should get covered, how many per cent of depositors should be covered. There have been studies and no final decision has been taken.”

Since the alleged scam at PMC Bank came to light, the RBI had put restrictions on the withdrawal of funds from the bank. Recently, it raised the withdrawal limit to Rs 25,000 per account from Rs 10,000.

Addressing a press conference at the BJP headquarters here, the finance minister said a committee comprising the secretaries of the economic affairs, rural affairs and urban development ministries, and a deputy governor of the RBI would be formed.

Through this committee, the government intends to “understand and take necessary legislative steps to prevent such things from happening in the future”, she said.

The minister said she was not presuming that there are shortcomings in the present law. The panel will study the issue and “if necessary, in the forthcoming winter session of Parliament itself, we will be bringing in any amendments which may be necessitated”.

Earlier, angry depositors had gathered outside the BJP office in south Mumbai ahead of Sitharaman’s press conference. When she arrived, they shouted slogans, demanding that their money should be returned to them.

Harbans Singh, a bank customer, told reporters the depositors expected the minister to give an assurance that their money was safe, but they were disappointed. Sitharaman said she would speak to the RBI governor and convey the “urgency and distress” of the depositors and request him to expedite permission to withdraw the money deposited.

“I heard about their problems and explained to them that multi-state cooperative banks...are regulated by the RBI,” she later said, adding that North Block’s direct role is limited since the RBI is the regulator. She was, however, quick to add that the Centre was seized of the matter.