RBI revises guidelines for locker facility; banks' liability to be 100 times of annual rent

The Reserve Bank of India on Wednesday came out with revised guidelines for locker facility provided by banks, under which the banks' liability will be 100 times that of the annual rent of the safe deposit locker in case of loss of contents of locker due to fire, theft, burglary, dacoity, among others.
 
The RBI said the new guidelines have been framed taking into consideration the various developments in the area of banking and technology, nature of consumer grievances and also the feedback received from banks and Indian Banks' Association.
 
The new guidelines will come into force from January 1, 2022, and will be applicable to both new and existing safe deposit lockers and the safe custody of articles facility with the banks.
 
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Under the revised guidelines, the banks will have to incorporate a clause in the locker agreement that the locker-hirers will not keep anything illegal or any hazardous substance in the safe deposit locker.
 
The banks will also have to maintain a branch wise list of vacant lockers as well as a wait-list in Core Banking System or any other computerised system compliant with the Cyber Security Framework issued by the RBI for allotment of lockers and to ensure transparency.
 
The central bank also detailed the compensation policy and liability of banks in the revised instructions. The banks will have to put in place a detailed board-approved policy outlining the responsibility owed by them for any loss or damage to the contents of the lockers due to their negligence.
 
"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," the RBI said.
 
However, banks should exercise appropriate care to their locker systems to protect their premises from such catastrophes.
 
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"As banks cannot claim that they bear no liability towards their customers for loss of contents of the locker, in instances where loss of contents of locker are due to" events like fire, theft, burglary, dacoity, robbery, building collapse or "attributable to fraud committed by its employee(s), the banks' liability shall be for an amount equivalent to one hundred times the prevailing annual rent of the safe deposit locker," the guidelines said.
 
The banks will also need to have a branch insurance policy to minimise the loss due to incidents like robbery, fire, natural calamities, loss during shifting/ merger of branch, among others, affecting contents of lockers.
 
To ensure prompt payment of locker rent, banks will be allowed to collect a term deposit at the time of allotment, which would cover three years' rent and the charges for breaking open the locker in case the locker hirer neither operates the locker nor pays the rent.
 
"If there is any event such as merger/ closure/ shifting of branch warranting physical relocation of the lockers, the bank shall give public notice in two newspapers (including one local daily in vernacular language) in this regard and the customers shall be intimated at least two months in advance...," it said.
 
The banks will have to put in place a comprehensive revised board-approved policy and SOPs on safe deposit locker facility/ safe custody article as per the revised instructions, RBI said.

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