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New RBI Bank Locker Rules and How they affect you

The RBI published a set of guidelines on 18th August 2021, regarding a set of new bank locker rules after a thorough go-through of customer feedbacks and grievances. These guidelines will apply to the banks from the 1st of January 2022. So, let’s take a glance and understand better about the new bank locker rules issued by RBI.

6 Bank Locker Rules That You Should Know About:

  • In case of loss of locker contents, banks have to compensate 100 times of the locker rent:

If there is any loss of the locker contents of the holder, due to the negligence of the bank, the holder of the locker is rightful to a compensation of 100 times the locker rent.

For example, let us assume the contents of the locker were stolen in a burglary, and the locker rent is charged at Rs. 5000, so the locker holder is entitled to a compensation of 100 times of Rs. 5000, i.e. Rs 5 Lacs.

Note: The compensation amount isn’t influenced by the valuation of the contents present in the locker. Whether the article was of Rs. 10 or Rs. 10,000, the compensation will remain 100 times of locker rent.

  • Email and SMS alerts have to be sent when the locker is accessed:

To protect the locker holders against unauthorized access, the bank will now be required to send Email and SMS alerts on the registered mail id and mobile number on the same day when the locker is accessed.

The date and time of the access and the information of the redressal mechanisms available in case of unauthorized access are also to be provided by the bank.

  • CCTV footage of the last 180 days has to be necessarily kept by the bank:

The common areas and door of entry and exit to the locker room must be in the vigil of a CCTV camera for monitoring the activities in and out of the locker room.

The bank should be in the possession of this CCTV footage of the last 180 days.

  • 3 years locker rent can be charged as a term deposit by the banks:
    The banks are eligible to ask for a certain term deposit from their locker holders. This deposit is charged from the holders in case of future default in rent payments.

For example, if the rent is Rs. 4000 then the term deposit amount can be Rs. 12000 plus some additional charges of Rs. 500-100. For term deposits, it is not uncommon for banks to ask the account holders to create an FD with the bank. This should be accepted given that the amount of the FD is small without any exorbitant fee.

It is important for account-holders to know that no amount greater than 3 years locker rent plus some nominal charges can be charged from them so that they do not fall into the trap if the bank asks them to create an FD of Rs.2-3 lacs or purchase some additional insurance for the same.

  • Waitlist and vacant locker list has to be displayed to the potential locker holders:

To ensure transparency in the locker allocation process and remove ambiguity and about the vacancy of lockers, every locker application that the bank receives has to be duly acknowledged and also has to be given a waitlist number,

This number along with the number of vacant lockers are to be displayed in the banks, to provide the required clarity to the locker applicants.

  • Closure and discharge situations listed:

According to point 6 of the RBI notifications, there are three listed conditions under which the locker can be opened by the bank.

  • If the hirer loses the key and requests for breaking open the locker at her /his cost; or
  • If the Government enforcement agencies have approached the bank with orders from the Court or appropriate competent authority to seize lockers and request for access to the lockers; or
  • If the bank is of the view that there is a need to take back the locker as the locker hirer is not cooperating or not complying with the terms and conditions of the agreement.

Banks shall have a clear Board-approved policy together with a Standard Operating Procedure (SOP) for breaking open the lockers for all possible situations keeping in view the relevant legal and contractual provisions.

New Locker Agreement for existing shareholders

As per point 2.1.1 of the RBI Notification

“Banks shall have a Board approved the agreement for safe deposit lockers. For this purpose, banks may adopt the model locker agreement to be framed by IBA. This agreement shall be in conformity with these revised instructions and the directions of the Hon’ble Supreme Court in this regard.

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 ordinary course of business to safeguard the interests of the bank. Banks shall renew their locker agreements with existing locker customers by January 1, 2023.”

  • For all the existing locker holders there will be a new locker agreement that will be drafted which will consider all the new rules and guidelines. The bank authorities will reach out to the existing holders for signing the new contract in the time frame of 1-2 years.

These were the 6 new bank locker rules that were introduced by the RBI for an increased level of transparency as well as accountability towards the locker holders. To read about the other minor changes that were mentioned in the guidelines.

Manoj Amarwal

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(Saarthi for your financial dream)