scorecardresearch
RBI extends deadline for new bank locker agreement; check details

RBI extends deadline for new bank locker agreement; check details

In cases where operations in lockers have been frozen for non-execution of agreement, the same needs to be unfrozen with immediate effect.

RBI extends deadline for new bank locker agreement; check details  RBI extends deadline for new bank locker agreement; check details

You can now sign new bank locker agreement by December 31, 2023. This is because following the delay by banks in signing a new agreement with their customers by January 1, 2023,  the Reserve Bank of India extended the deadline till the end of this year.


“It has come to the notice of RBI that a large number of customers are yet to sign the revised agreement. In many cases, the banks are yet to inform the customers about the need to do so before the stipulated date. Accordingly, it has been decided to extend the deadline for banks to complete the process of renewal of agreements for the existing safe deposit lockers in a phased manner by December 31, 2023, with intermediate milestones of 50 per cent by June 30, 2023, and 75 per cent by September 30, 2023,” stated RBI circular.


In cases where operations in lockers have been frozen for non-execution of agreement, the same needs to be unfrozen with immediate effect. “Further, banks have been advised to make necessary arrangements to facilitate execution of the revised agreements by ensuring the availability of stamp papers, etc,” stated RBI.


The revised rules were applicable to existing customers from January 2023 and were already in force for new customers from January 2022.


The new locker agreement says that the new agreement must not have any clauses that are unfair to the customers.


The August 18, 2021 notification by RBI stated, “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 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 the 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."


One of the important clauses states that the banks’ liability shall be for an amount equivalent to one hundred times the prevailing annual rent of the safe deposit locker in case of any liability of banks arising from events like fire, theft, burglary, dacoity, robbery, building collapse or in case of fraud committed by the employees of the bank.


“It has the responsibility 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. 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 incidents mentioned above 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.”


Relating to insurance of locker contents by the customer the agreement states that “banks shall clarify in their locker agreement that as they do not keep a record of the contents of the locker or of any articles removed therefrom or placed therein by the customer, they would not be under any liability to insure the contents of the locker against any risk whatsoever. Banks shall under no circumstances offer, directly or indirectly, any insurance product to its locker hirers for insurance of locker contents.”

Also read: India may grow even less than 5% next year: Ex-RBI Governor Raghuram Rajan  

Also read: ICICI Bank is transforming banking through tech infusion, but is that enough?

 

Published on: Jan 24, 2023, 9:39 AM IST
Posted by: Tarab Zaidi, Jan 24, 2023, 9:32 AM IST
IN THIS STORY