RBI GUIDELINES FOR BANKS

1. Context

2. RBI Revised Guidelines for Locker management

2.1 What is Locker Agreement?

• According to the PNB locker agreement policy, At the time of allotment of the locker to a customer, the bank shall enter into an agreement with the customer to whom the locker facility is provided, on a paper duly stamped.
• A copy of the locker agreement in duplicate signed by both the parties shall be furnished to the locker- hirer to know his/her rights and responsibilities.
• Original Agreement shall be retained with the bank's branch where the locker is situated.

2.2 Locker Rent

• Banks could encounter circumstances when the locker-hirer does not maintain the locker or pay the fee. Banks are permitted to demand a Term Deposit at the time of allotment, which would cover three years' rent plus the costs associated with opening the locker in the event of an emergency, to assure prompt payment of locker rent.
• According to the RBI notification dated August 18, 2021, "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."
  

2.3 Discharge of locker contents by banks due to non-payment of locker rent

• According to the RBI notification, "Banks shall have the discretion to break open any locker following due procedure if the rent has not been paid by the customer for three years in a row.
• The bank shall ensure to notify the existing locker-hirer prior to any changes in the allotment and give him/her reasonable opportunity to withdraw the articles deposited by him/her. A clause may be incorporated in the locker agreement to this effect."
• Banks must make sure that the inventory created following locker opening and during claim settlement is in the proper forms, or as close to them as the situation calls for, as stated at the end of this circular.
• In addition, unless otherwise required by law, banks must not examine sealed or unopened packets placed with them for safe custody or discovered in a locker before releasing them to the nominee(s) and surviving locker hirers/depositors of safe custody items.

2.4 Nomination Facility

3. What is new for Customers?

• For lockers operated through an electronic system, the bank must institute measures to safeguard it against any breach of security.
• It must also devise a standard operating procedure for issuing a new password should the customers have lost or forgotten them.  Customers must also inform the bank immediately if they lose the locker key.
• Banks would reserve the discretion to break open the locker with regards to due procedure if the rent stands pending for three years in a row. They must however inform the user and accord him ‘reasonable opportunity’ to withdraw the deposited contents.
• The break-open process would take place in the presence of a bank officer and two independent witnesses and the entire process needs to be taped. The idea is to collect evidence in case of any dispute or in the future.

For Prelims