M Damodaran Committee Recommendations on Banking Customer Service

The committee, headed by former SEBI chief M Damodaran, has proposed a slew of consumer-friendly measures. The committee was set up by RBI and if the recommendations are accepted, Bank account holders can expect better standards of service and more secure ways of doing business. Here are the recommendations:

• A guaranteed payment of up to Rs 5 lakh (raised from Rs 1 lakh) under deposit insurance to an account holder if a bank fails.
• No liability on customer for losses in ATM and online transactions
• Instant blocking of ATM card through SMS for lost/misused cards
• Transition to chip-based card with a photograph
• Automatic update of senior citizen status in core banking solution branch
• Pensioners to be allowed to submit life certificate in any bank branch
• A common toll-free number for all banks, like 100 for police
• A third-party Know Your Customer data bank
• A detailed break-up of service charges for basic services
• Small remittances at reasonable price
• Compensation for delayed return or loss of title deeds in the custody of banks
• Plain vanilla savings account without a minimum balance requirement
• Prepaid instruments worth up to Rs 50,000 for frequent travellers
• A chief customer service officer for grievance redressal in every bank