New Delhi: The Reserve Bank of India (RBI) had in January 2023 extended the deadline for banks to complete the process of renewal of locker agreements in a phased manner by 31 December 2023. Banks have to touch the first milestone of renewal of 50 per cent of the agreements by 30 June 2023. The second milestone for the banks is a renewal of 75 per cent of the agreements by 30 September 2023.
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Why Locker Agreements Need to Be Renewed
The central bank provided instructions to banks on locker rules after a February 2021 judgment by the Supreme Court which directed the RBI to finalise regulations for locker management within six months from the date of the order.
In August 2021, the RBI complied with the order by issuing a circular that requires banks to have a board-approved agreement in place for lockers.
“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,” the RBI notification said.
Even though the agreements incorporating the new rules came into force on 1 January 2022 for new locker customers, the RBI had given a window for banks to complete the process for existing locker customers till 1 January 2023. However, before the January 1 deadline, both RBI and banks realised that a large number of customers were yet to sign the revised agreements.
For that reason, the RBI decided to extend the deadline for banks to complete the process for existing safe deposit locker customers in a phased manner by 31 December 2023.
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Agreement on Stamp Paper
The new locker agreement needs to be made on a stamp paper which the banks are to provide free of charge, according to RBI guidelines.
“Banks are advised to facilitate the execution of fresh / supplementary stamped agreements with their customers by taking measures such as arranging for stamp papers, franking, electronic execution of the agreement, e-stamping, etc., and provide a copy of the executed agreement to the customer,” the RBI circular issued on 24 January 24 2023 had said.
There exists, however, a confusion regarding the denomination of the stamp paper as the central bank has not specified any.
While public sector banks are asking for the agreement on a Rs 20 stamp paper, private banks are demanding various denominations between Rs 100 and Rs 200 for a stamp paper, the Moneycontrol reported quoting several customers. The report says different branches of the same bank in the same city differ on the denomination of the stamp papers.
“There is a lack of clarity on the denomination of the stamp paper,” as per an unnamed bank official mentioned in the report.
Banks have to provide a copy of agreement to customers, as per RBI guidelines.
“A copy of the locker agreement signed by both parties shall be furnished to the locker-hirer to inform her about her rights and responsibilities. The original agreement shall be retained with the bank’s branch where the locker is situated,” stated the guidelines.
You should ensure that you read carefully before signing the agreement that the bank provides. If you disagree with certain clauses that your bank has mentioned, talk to your bank and ensure the terms are per the RBI guidelines.
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FDs for Locker
The RBI has allowed banks to seek fixed deposits (FDs) at the time of locker allotment, that are capable of covering three years’ rent and charges for breaking open the locker, if needed. This covers situations where the locker-holder neither operates the locker nor pays the rent. However, banks cannot break open the locker in case of customers with a good track record.
Apart from that, if a bank collects locker rent in advance, but the locker holder surrenders the locker mid-term, the bank will have to refund the proportionate amount of advance rent collected.
Discharge from liability
The responsibility for deterioration or damage caused to the contents of the locker caused by rain, flood, earthquake, lightning, civil disturbance, riot, terrorist attack, or negligence of the customer will not be borne by the bank.
Compensate in case of theft, fire
However, it is the responsibility of banks to take all steps for the safety and security of the premises in which the safe deposit vaults are contained. The bank will have to compensate the locker-holder in case of incidents like fire, theft, burglary, robbery, dacoity, building collapse, negligence by the bank, or fraudulent activity by its employees. The bank’s liability will be equivalent to 100 times the prevailing annual rent of the safe deposit locker.
Alert for locker access
Register your email id and mobile number with the bank. The banks will send an email and SMS alert intimating the date and time of locker operation. The banks will also provide the redressal mechanism for unauthorised locker access.
