What are the RBI’s revised bank locker rules? What are the key changes that the banks must follow?
The apex banking regulator had made it mandatory for all banks in the country to follow the revised bank locker rules. the amendments made by the Reserve Bank of India regarding the locker agreements have been in effect from January 1, 2023.
What is the whole story?
Efficient management of safe deposit, transparency, and security were the key concerns of the RBI, and thus, to strengthen security, transparency, and safe deposit management, the Reserve Bank of India revised its guidelines for banks. The RBI released its list of guidelines, and it came into effect on January 1, 2023.
These guidelines are applied to not only new safe deposit lockers but also to existing safe deposit lockers and other bank facilities.
To adhere to these guidelines by the apex bank regulator, RBI, banks all over the country ought to renew their agreements with the locker users, latest by January 1, 2023.
The guidelines have come after a landmark case in the Supreme Court (Amitabha Dasgupta vs United Bank of India, February 2021).
Key changes for the banks:
The provisions of the amendments involve strengthening the locker’s safety, rent collection, verification for transfer, management of the locker, and revealing the contents.
Post these amendments, the lockers must come to an agreement with the customers. The agreement must be made on duly stamped paper. One copy of the agreement must be given to both parties.
According to one notification by RBI, the locker agreements are mandated to follow Indian Bank Association’s model.
RBI’s notification released on August 18, 2021
The notification released by the Reserve Bank of India on August 18, 2021, read as follows:
“Banks shall ensure that any unfair terms or conditions are not incorporated in their locker agreements. Further, the terms of the contract shall not be more onerous than required in the ordinary course of business to safeguard the interests of the bank,”
The Reserve Bank of India also insisted the banks renew their customer locker agreements by the first day of 2023, viz., January 1, 2023.
As per the amendments, banks all over the country will now have the liberty to obtain a term deposit at the very time of allotment to a customer. The term deposit may cover three years’ rent. In case a hirer does not operate it or pays the rent, charges for breaking open a locker will also apply.
It is important to note, however, that the banks are not allowed to obtain “term deposits” from existing locker holders. Additionally, banks will not be able to obtain “term deposits” from even the ones who have a “satisfactory operative account.”
The key idea behind this is that these provisions will guarantee the prompt payment of locker rent.
Additionally, banks must give notices in two newspapers, while also notifying customers at least two months in advance in case of a relocation of the bank branch, a merger, or a closure. In such a case, the bank must also give its customers the choice to close or change its facility.
Moreover, in case the locker rent is obtained in advance, the proportionate amount must be given back to the customer in case the account is surrendered.
Additionally, the locker agreements must make it clear that the bank is not under any liability to insure the contents deposited in the locker in case of any risks whatsoever. It must also make it clear that the bank does not hold any records of the locker contents. An interesting provision here is that the banks are not allowed to provide any insurance products to their customers to safeguard the locker contents.