RBI’s revised guidelines for locker management
Why in news :
- In order to enhance the safety, transparency and effective management of safe deposit lockers provided by banks, apex banking regulator Reserve Bank of India (RBI) released a list of revised guidelines, which came into force from January 1, 2022.
More about the news :
- The guidelines followed observations made by the Supreme Court in Amitabha Dasgupta vs United Bank of India (February 2021).
- The agreements with existing customers were to be renewed by January 1, 2023.
The changes introduced by the RBI :
- Now, while allotting lockers, banks have to enter into an agreement with the customer on duly stamped paper, with a copy being provided to both parties.
- The terms of the contract must not be “more onerous than required in the ordinary course of business to safeguard the interests of the bank”.
- The provisions entail ensuring the safety of the locker, its management, rent collection and verification for transfer or revealing the contents.
- Banks would now be allowed to obtain a ‘term deposit’ at the time of allotment to a consumer.
- It would cover three years’ rent and the charges for breaking open a locker should the locker-hirer neither operate it nor pay rent.
- The central idea here is to ensure the prompt payment of locker rent.
- In the event of a merger, closure or shifting of a branch that would require physical relocation of lockers, the banks would be required to give notices in at least two newspapers with customers intimated at least two months in advance along with the option to change or close the facility.
- Further, if the locker rent is collected in advance, the proportionate amount would require to be refunded to the customer should s/he surrender the account.
- Banks would not be under any liability to insure the contents of the locker against any risk whatsoever.
- Additionally, under no circumstances can it offer insurance products to its customers for insuring the contents.
Changes made with respect to electronic lockers :
- 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 breakopen 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.
Syllabus : Prelims + Mains; GS 3 – Indian Economy