Friends, you and your family must be having one safe deposit locker in some bank. Are you aware that Central Government and Reserve Bank have changed the rules for operating the locker? Most of the bank branches have not communicated these rules to their customers. As per new bank locker operation rules, new mechanical lockers should conform to safety benchmarks set by the Bureau of Indian Standards (BIS). Also, banks must ensure that electronically operated locker systems are compliant with Cyber Security Framework mandated by the RBI.
As per new laws, each customer who is holding a locker in any bank branch has to execute a new agreement with the said bank by 31st December 2022. Most of the friends and family members with whom I am in touch to date have not signed this agreement, as none of us were aware of this. According to RBI, the laws had been revised after taking into account consumer grievances, feedback from the banks as well as major developments in banking technology.
Major new rules are as follows:
Locker Rental Rules– To ensure that the banks did not incur losses on account of non-payment of locker rent, RBI has allowed banks to take a term deposit at the time of allotting the locker, which is expected to cover rent for three years, and expenses that the bank would incur in case a locker had to be broken open. However, the RBI made it clear that the banks could not existing holders or those with satisfactory operative accounts to cough up such term deposits. In addition, RBI has en powered the banks to break open the locker if rent is not paid for three years.
Responsibility of the Banks– The bank shall not be liable for any damage and/or loss of contents of the locker arising from natural calamities or Acts of God like earthquakes, floods, lightning, and thunderstorm, or any act that is attributable to the sole fault or negligence of the customer. Banks should have in board policy in case the locker has been damaged by their negligence. Banks also have to include a clause in the agreement, prohibiting customers from storing anything hazardous in the locker. In case of fraud by banking professionals, fire, or building collapse, banks are liable to pay 100 times the yearly rent.
A New Locker Agreement– New locker agreement should come into place effective 1st January 2022. Banks can use the IBA-drafted model locker agreement, which must comply with the updated instructions and the Supreme Court’s directives. Banks are not supposed to incorporate any unfair terms or conditions.
Email and SMS Alerts– Banks must notify their customers on their registered email address and mobile number through an email and SMS regarding the date and time of the locker operation, along with the redressal mechanism available in the event of unauthorized locker access. This must be done before the end of the day.
A Change in Locker Allotments– Banks will now maintain a branch-wise list of vacant lockers and a waitlist in their Core Banking System or any other system aligning with RBI’s cyber safety framework. Should a locker not be available, the bank must acknowledge receipt of all applications for locker allotment and provide a waitlist number to customers.
Ensuring Safety and Security– If found necessary, banks must implement an Access Control System to prevent unlawful entry and maintain a digital record of locker room access with a time log. Banks may cover areas such as the entry, exit, and common areas with recording saved up to 180 days. In case of unauthorized access or theft or security breach, the bank must keep the CCTV recording until the investigation concludes and the matter is resolved. Banks must also ensure that their identification code is imprinted on all the locker keys for clear identification by law enforcement agencies during emergencies. For lockers that are operated by an electronic system, precautionary measures must be taken to ensure safety against hacking or security breaches. The RBI has made it mandatory for banks to verify their electronically controlled lockers with RBI’s Cyber Security Framework with a permanent record of locker actions.
Transfer of Content in Case of Demise– In case the sole locker hirer nominates an individual to receive the locker content in case of death, the bank will proceed to give the nominee the access of the locker with the liberty to remove contents after the following:
After an inventory is taken in the prescribed manner, verification of the death certificate, verifying the identity and authenticity of the individual approached.
In case the locker was hired jointly with clear instructions on operating it under joint signatures, and the locker hirer(s) nominate other individuals (s), the bank must give access to the locker and the liberty to remove content jointly to the survivor(s) and the nominee(s). This will only be done upon inventory being taken in a prescribed manner following the demise of any of the locker hirers.
I hope the above information will be useful to you all.
Waiting for your views on this blog.
Anil Malik
Mumbai, India
23rd November 2022