All You Need To Know About The Revised Locker Rules of Banks

The Reserve Bank of India (RBI) had earlier modified the guidelines/instructions where banks shall maintain a branch-wise list of vacant lockers as well as a wait-list in Core Banking System (CBS) or any other computerized system compliant with the Cyber Security Framework issued by RBI. This step has been taking into account various developments in the area of banking and technology, the nature of consumer grievances, as well as feedback received from banks and the Indian Banks' Association (IBA). In this respect, banks are recommended to develop their own Board-approved policy/operational guidelines, taking into consideration the new instructions.

The updated instructions will take effect on January 1, 2022, and will apply to both new and existing safe deposit lockers as well as the banks' safe custody of articles facility. According to RBI, in order to facilitate customers making informed choices, banks shall maintain a branch-wise list of vacant lockers as well as a wait-list in Core Banking System (CBS) or any other computerized system compliant with the Cyber Security Framework issued by RBI, for the purpose of allotment of lockers and ensure transparency in allotment of lockers. The banks shall acknowledge the receipt of all applications for allotment of lockers and provide a waitlist number to the customers if the lockers are not available for allotment."

Customer Due Diligence (CDD) for Lockers

Existing bank customers who have applied for lockers and are fully compliant with the CDD criteria set forth in the Master Direction - Know Your Customer (KYC) Directions, 2016 as amended from time to time may be granted safe deposit lockers/safe custody article facilities, relating to persistent adherence. Customers who have no other banking relationship with the bank may be offered safe deposit locker / safe custody article services after meeting the CDD criteria set forth in the Master Direction - Know Your Customer (KYC) Directions.

All customers, regardless of their rights or capacities, must undergo due diligence before renting a locker. Banks must include a provision in the locker agreement stating that the locker-hirer/s must not store anything unlawful or harmful in the Safe Deposit locker. If the bank suspects a customer of depositing any unlawful or dangerous item in the safe deposit box, the bank has the authority to take any action it considers necessary in the circumstances against that customer. The banks must collect recent passport-size pictures of the locker-hirer(s) and individual(s) authorized by the locker-hirer(s) to operate the locker and keep them in the bank's branch's locker-hirer records.

Locker rent

Banks may confront circumstances when the locker-hirer does not use the locker and does not pay the rent. To ensure prompt payment of locker rent, banks are permitted to acquire a Term Deposit at the time of allotment that covers three years' rent as well as the charges of breaking into the locker in the event of an emergency. Banks, on the other hand, are not required to collect such Term Deposits from current locker holders or those with an acceptable operating account. Packaging of locker facility allocation with term deposit placements in excess of what is explicitly authorized above will be deemed a discriminatory practice.

If locker rent is collected in advance, the proportionate amount of advance rent received will be reimbursed to the customer if the locker is surrendered by the customer. If any event, such as a merger, closure, or branch relocation, necessitates physical relocation of the lockers, the bank must publish a notice in two newspapers (one of which must be a local daily in vernacular language), and customers must be notified at least two months in advance, with options to change or close the facility. In the event of an unforeseen relocation due to natural disasters or other emergency situations, banks must make every effort to notify their customers as soon as possible.

Regular Operations by Customers

Only the locker hirer and/or those officially authorized by him/her should be permitted to use the locker following adequate authentication and verification of the authorization by the bank personnel involved. The bank must keep track of all persons who have accessed the lockers, including locker-hirers, as well as the date and time (both check-in and check-out time) on which they entered and closed the locker and verified their signature. Banks shall send an email and SMS alert to the registered email ID and mobile number of the customer before the end of the day as a positive confirmation intimating the date and time of the locker operation and the redressal mechanism available in case of unauthorized locker access.

Settlement of Claims in case of death of a Customer

Banks shall have a Board approved policy for settlement of claims. The policy shall be in conformity with the regulatory instructions and the Model Operational Procedure (MOP) for settlement of claims of the deceased constituents formulated by the IBA and in case of State and Central Co-operative Banks, MOP formulated by NABARD, RBI said. In order to ensure that the articles left in safe custody and contents of lockers are returned to the genuine nominee, as also to verify the proof of death, banks shall devise their own claim formats, in terms of applicable laws and regulatory guidelines.

The time limit for settlement of claims: Banks shall settle the claims in respect of deceased locker hirers and shall release contents of the locker to the survivor(s) / nominee(s), as the case may be, within a period not exceeding 15 days from the date of receipt of the claim subject to the production of proof of death of the depositor and suitable identification of the claimant(s) with reference to the nomination to the bank's satisfaction, according to RBI.