Mudra Compass

We are always worried about safeguarding our valuables such as gold, silver, valuable stones, important documents etc., In earlier times, people generally had a Safe Metal Locker in their home. Sometimes it was inside the wall or even on the floor covered with tile. Before those valuables were stored in Kumbh – a kind of Matak and that has been kept deep in land deep, after that some people even plant trees over it to identify the place exactly where it is kept in land. But the scenario is changed as Banking has a new way to store valuables with the Locker System but what if that valuables may be stolen?

The Reserve Bank of India (RBI) said in 2017 that banks would not be liable to compensate you if the contents of your locker are stolen or damaged due to a natural calamity. Banks cannot raise their hand in the event of anything unforeseen happens towards their customers for the operation of lockers. In February, the Supreme Court bench of Justices Mohan M Shantanagoudar and Vineet Saran asked the RBI to frame uniform rules for all banks regarding locker management within six months. The judgment came on an appeal filed by Kolkata native Amitabha Dasgupta against an order of the National Consumer Disputes Redressal Commission.

The Reserve Bank of India comes with guidelines related to hiring lockers. The Reserve Bank has also mentioned in details the compensation policy and liability to banks in the revised instructions. According to the Reserve Bank, banks will have to implement such a policy approved by their board, in which their responsibility can be fixed for the goods kept in the locker due to negligence. 

RBI in its notification recently stated that Banks cannot disown liability for loss of locker contents due to theft or due to fraud by its employees or incidents (like fire/theft/ burglary/ robbery/dacoity) 

The bank’s liability for such loss has been put at 100 times the prevailing annual rent for the locker which is likely to be a very small amount in comparison to the value of the contents of most people’s lockers. However, RBI has also stated that the bank would not be liable for loss of damage to locker contents due to natural calamities or customer negligence. Furthermore, the RBI Circular said that banks will need to make appropriate arrangements to protect their premises from such calamities. Apart from this, the bank will be solely responsible for the security of the premises to where the safe Deposit Lockers are Located.

Model Locker Agreement

In addition, 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 Honorable 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 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.

 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.

Furthermore, banks will have to include a provision in the locker agreement, under which the person renting the locker will not be able to keep any illegal or dangerous goods.  If the bank suspects the deposit of any illegal or hazardous substance by any customer in the safe deposit locker, the bank shall have the right to take appropriate action against such customer as it deems fit and proper in the circumstances.

Locker Allotment

List of locker to be given to RBI, the Reserve Bank said in the circular that banks will have to make a list of;

Vacant Lockers Branch wise – Apart from this, they will have to enter their waiting list information in Core Banking System (CBS) of any other computerized system compliant with cyber security framework for the purpose of allotment of lockers. Further, the banks will have to ensure transparency in allotment of Lockers.

Issuance of Waitlist Number – The circular has instructed banks that they will have to give acknowledgement of receipt for all applications of locker allotment. If the locker is not available, the banks will have to give the wait list number to the consumers.

These revised guidelines regarding Lockers will come into effect from January 1, 2022.