M. Damodaran Committee and Rakesh Mohan Committee (Download PDF)


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M. Damodaran Committee Purpose: Customer Service in Banks,The committee, headed by former SEBI chief M Damodaran, has proposed a slew of consumer-friendly measures. RBI set up the committee 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 as follows.

M. Damodaran Committee 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 allow submitting 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 travelers.
  • A chief customer service officer for grievance redressal in every bank.

Rakesh Mohan Committee

Purpose: Small Savings: Tax and Interest Rates

Rakesh Mohan Committee Recommendations

1) End of the Railway Board and its replacement by an Indian Railways Executive Board (IREB) comprising members from the government, railways, private sector and academia.

  • The government would appoint members on the proposed IREB and Indian Railway Regulatory Authority (IRRA).
  • Railway must corporatize into an Indian Railway Corporation (IRC) with the government’s role being limited to setting policy directions.
  • New managers will induct, and will know as agents.
  • The IREB will consist of five members initially, headed by a chairperson who will be the chief executive officer of railways. He will appoint through a global selection process.
  • Chief operating officers will head the five core businesses of the railways — freight transport, passenger transport, suburban transport, fixed infrastructure and other infrastructure —. Besides, there will be two vice-presidents for human resources and finance/planning.

As a whole, the setup of Indian railways will subvert.

2) End of railway budget.

3) Privatisation of all railway production units manufacturing electric and diesel locos, coaches, wheel and axle workshops.

4) Privatisation of all maintenance workshops, which are employing thousands of employees. On Central Railway itself, there are workshops at Matunga, Parel, Byculla, Manmad, Bhusaval, Bhopal and Gwalior, employing respectively 7000, 6000, 1200, 1400, 1300, 1500 and 600 workers. Similar workshops are there with on all the nine zonal railways.

5) Printing presses should sold out. These printing presses are printing tickets, money receipts, valuable documents, timetables and all forms and books that meant for use by the railways and the public. The Central Railway’s press is at Byculla, with 1300 employees.

6) Selling of all railway quarters, which occupies by railway employees, mostly belonging to essential departments, lowest strata, etc. The Rakesh Mohan committee has estimated that Rs 20,000crore could fetch by selling out these quarters. What will happen to the essential staff like drivers, guards, station masters and lower class of railway employees, namely Safaiwallis, Safaiwallas, Khalasis, Hamals, etc, who stay in these quarters and perform round the clock duties? How can they afford to pay the inevitable huge increase in the rent rates and where can they go if they cannot afford the increased rents?

7) Privatisation of maintenance work such as station sanitation, maintenance of railway tracks and railway buildings, electrical maintenance, maintenance of wagon cleaning, water supply to passengers, bed-roll supply in the trains, etc, and several day to day activities which are being done by regular railway employees in vital and non-vital services.

8) Privatisation of commercial activities like catering services, goods booking, parcel booking, computer reservation, etc.

9) Privatisation of railway hospitals. There are big railway hospitals having specialised treatment arrangements for all major diseases at the headquarters of all the nine zonal railways, several railway hospitals at the divisional headquarters, inside workshops and several other locations. They are open not only for railway employees and their family members, but for public also. The committee has recommended the sale of all these hospitals. As in the case of railway quarters, the sale of railway departmental medical services would mean a heavy increase in the medical expenses for railwaymen. These two steps, i e sale of railway quarters and medical services, will impoverish the railwaymen, at whose cost rich builders and property owners will earn huge profits.

10) Privatisation of schools and colleges. The Indian Railways run a large number of schools and colleges for the benefit of railwaymen’s children, considering the difficulties of the railwaymen posted in locations where their children cannot easily get access to educational facilities. The committee has now recommended privatising them. This will take education beyond the reach of railwaymen’s children.

 11) The committee has also recommended that Indian Railways should end all concessions and social services provided to the public, such as concessions given to seasonal ticket-holders, senior citizens, those physically handicapped, students, children, artists, freedom fighters, etc. It has also suggested stopping issuing passes to retired railway employees.

- Published/Last Modified on: December 27, 2016

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