Bank locker rules revised: Things to keep in mind

All the customers need to execute new locker agreements as per the regulatory guidelines issued, with their respective branches on the latest format issued by the bank

FP Trending May 25, 2023 18:10:29 IST
Bank locker rules revised: Things to keep in mind

Representational image. News18

A State Bank of India advisory has been doing rounds on the internet urging locker holders to sign the revised locker contracts by June 30, 2023. Over the last few days, the bank has been sending messages to its customers urging to sign the updated locker agreements. “Dear Customer, please visit your branch for the execution of a revised locker agreement. In case you have already signed the revised agreement earlier, you still need to execute a supplementary agreement,” the note sent by SBI reads.

Bank of Baroda has also been asking its customers who have been availing locker facilities at its branches to sign revised locker agreements by the stipulated date. All other banks are also likely to soon follow suit.

Delay in RBI mandate

A circular to protect customers’ interests was issued by the Reserve Bank of India (RBI) on January 23, 2023. According to the circular, banks must inform customers about renewing locker agreements by April 30, 2023 and make sure that 50 percent of customer agreements are revised by June 30 and 75 percent by September 30. As this deadline holds near, customers may also be asked to renew their contract.

Revised locker rules

As per the revised locker rules, the banks will have to compensate in case of events involving fire, theft, burglary, robbery, dacoity, building collapse, negligence by the bank, or fraudulent activity by its employees. The bank’s inability to do so will be equivalent to 100 times the annual rent of the safe deposit locker.

In addition, banks shall shoulder no liability for any damage concerned to loss of content due to natural calamities or negligence on part of the customer. If the rent remains unpaid for three years in a row, the bank, at its own discretion, may break open the locker after informing the customer. The customer shall be allowed to withdraw the locker articles.

In case the customer surrenders the locker and the rent is paid in advance, the bank is required to refund the proportionate amount. But even if the rent is being paid regularly and the locker remains inoperative for seven years, the bank holds the power to transfer the locker contents to the nominee after fulfilling the basic formalities.

Other guidelines include that the agreement needs to be on stamp paper, which the banks are to provide free of charge with a copy of the agreement to customers.

At the time of allotment of the locker, the RBI has permitted banks to obtain fixed deposits (FD) capable of covering three years’ rent. This will also include charges for breaking open the locker, if needed.

It is important to register your email id and mobile number with the bank, for the banks to intimate the activities of locker operation.

History of the case

The recent RBI mandate started with a Supreme Court judgement in February 2021, which ordered the RBI to finalise regulations for locker management within six months.

The RBI complied with the order in August 2021, issuing a circular. It said, “Banks may adopt the model locker agreement to be framed by the Indian Banks’ Association (IBA). This agreement shall be in conformity with these revised instructions and the directions of the Hon’ble Supreme Court in this regard.”

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