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Safe Deposit Locker / Safe Custody Article Facility

Reserve Bank of India (RBI) has extended the timeline for renewal of locker agreements.

Instructions on Safe Deposit Locker / Safe Custody Article Facility

Reserve Bank of India (RBI) had revised the instructions on Safe Deposit Locker / Safe Custody Article Facility provided by the banks. The revised instructions came into force with effect from January 01, 2022 and were made applicable to both new and existing safe deposit lockers and the safe custody of articles facility with the banks.

What are the instruction on Locker Allotment?

  • Banks shall maintain a branch wise list of vacant lockers as well as a wait-list. 
  • The banks shall acknowledge the receipt of all applications for allotment of locker and provide a wait list number to the customers, if the lockers are not available for allotment.

What are the instruction on Model Locker Agreement?

  • Banks shall have a Board approved agreement for safe deposit lockers. For this purpose, banks may adopt the model locker agreement to be framed by Indian Banks’ Association (IBA). 
  • IBA has been advised to review and revise the Model Agreement to ensure that it complies with the requirements of RBI's circular dated August 18, 2021 and circulate a revised version to all banks by February 28, 2023.
  • Banks were required to renew their locker agreements with existing locker customers by January 01, 2023. The deadline has been extended in a phased manner to December 31, 2023. Banks are advised to notify all their customers of the revised requirements by April 30, 2023 and ensure that at least 50% and 75% of their existing customers have executed the revised agreements by June 30 and September 30, 2023 respectively. 
  • Banks are required to report the status of compliance with these instructions on the DAKSH supervisory portal of RBI on a monthly basis. 

What are the instruction on Locker Rent?

  • To ensure prompt payment of locker rent, banks are allowed to obtain a Term Deposit, at the time of allotment, which would cover 3 years’ rent and the charges for breaking open the locker in case of such eventuality. 
  • Banks, however, shall not insist on such Term Deposits from the existing locker holders or those who have satisfactory operative account. 
  • The packaging of allotment of locker facility with placement of term deposits beyond what is specifically permitted above will be considered as a restrictive practice.
  • If locker rent is collected in advance, in the event of surrender of a locker by a customer, the proportionate amount of advance rent collected shall be refunded to the customer.

What are the instruction on Closure and Discharge of locker items?

Banks can break open the locker under any one of the following circumstances –

  • If the rent has not been paid by the customer for 3 years in a row. 
  • If the hirer loses the key and requests for breaking open the locker at her / his cost.
  • If the Government enforcement agencies have approached the bank with orders from the Court or appropriate competent authority to seize lockers and requested for access to the lockers.
  • If the bank is of the view that there is a need to take back the locker as the locker hirer is not co-operating or not complying with the terms and conditions of the agreement.

If the locker remains inoperative for 7 years and the locker-hirer cannot be located, even if rent is being paid regularly, the bank shall be at liberty to transfer the contents of the locker to their nominees / legal heir or dispose of the articles. 

What are the instruction on Compensation Policy / Liability for Banks?

  • The bank shall not be liable for any damage and / or loss of contents of locker arising from natural calamities or Acts of God like earthquake, floods, lightning and thunderstorm or any act that is attributable to the sole fault or negligence of the customer. Banks shall, however, exercise appropriate care to their locker systems to protect their premises from such catastrophes.
  • It is the responsibility of banks to ensure that incidents like fire, theft / burglary / robbery, dacoity, building collapse do not occur in the bank’s premises due to its own shortcomings, negligence and by any act of omission / commission. In instances where loss of contents of locker are due to incidents mentioned above or attributable to fraud committed by its employees, the banks’ liability shall be for an amount equivalent to 100 times the prevailing annual rent of the safe deposit locker.


References

Reserve Bank of India. (2021, August 18). 'Safe Deposit Locker/Safe Custody Article Facility provided by the banks - Revised Instructions'. Retrieved from https://rbi.org.in/Scripts/NotificationUser.aspx?Id=12146&Mode=0

Reserve Bank of India. (2023, January 23). 'RBI extends time for renewal of agreements for existing Safe Deposit Locker/Safe Custody Article Facility Provided by Banks'. Retrieved from https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=55092

Reserve Bank of India. (2023, January 23). 'Safe Deposit Locker/Safe Custody Article Facility provided by banks'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12443&Mode=0


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