- Date : 20/01/2022
- Read: 6 mins
New bank locker rules effective from January 1, 2022
If you already have a bank locker or are planning to rent one, it is advisable to be aware of the revised guidelines that the Reserve Bank of India (RBI) has issued in this connection. The new guidelines will be applicable for both new and existing users of locker facilities and cover two key issues: a term deposit that new customers will now have to pay and the responsibility of the banks.
The new rules will come into effect from January 1, 2022, except where otherwise specified, the August 8 notification said.
According to the RBI circular, the guidelines had been revised after taking into account consumer grievances, feedback from the banks, as well as "major developments" in banking and technology.
Locker rental rules
The circular noted that banks could face instances when renting the locker was not up-to-date with paying the required fees or did not manage the locker.
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 a 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 central bank made it clear that the banks could not ask their existing locker holders or those with a satisfactory operative account to cough up such term deposits.
In addition, RBI has also empowered the banks to break open any locker if the customer fails to clear the rent for three years in a row. However, banks are to follow the due procedure before taking this step.
Responsibility of the banks
RBI has also tried to shield banks from the responsibility of damage to the contents in a locker due to a natural disaster or on account of the customer's actions.
“The bank shall not be liable for any damage and/or loss of contents of locker arising from natural calamities or Acts of God, like earthquake, floods, lightning, and thunderstorm, or any act that is attributable to the sole fault or negligence of the customer,” RBI "aid.
However, banks are required to have in place a board-approved policy outlining their responsibility in case a locker has been damaged due to their negligence.
For instance, they have to take appropriate steps to ensure their locker systems are protected from such catastrophes.
They will also have to include an additional clause in the locker agreements prohibiting the customer 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.
Currently, the rent of lockers depends on the bank, the location of the branch and the size of the locker, which come in three sizes - small, medium and large. State Bank India's rent ranges from Rs 1,000 for a small safe at a rural branch to Rs 9,000 for a large locker at metros. In addition, customers have to pay GST for this facility.
A new locker agreement
With the operational standards being implemented from January 1, 2022, a new locker agreement shall come into place with the bank for safe deposit locker holders. This is done to make locker holders eligible for the new pay.
Banks can use the IBA-drafted model locker agreement, which must comply with the updated instructions and the Supreme Court’s directives, as stated in the RBI notification.
Banks must ensure that their locker agreements do not incorporate any unfair terms or conditions and see to it that the terms are not more onerous than required while safeguarding the interests of the bank. As per the RBI notification, banks must also renew their locker agreements with existing customers by January 1, 2023.
Email and SMS alerts
Banks must notify their customers on their registered email address and phone 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 unauthorised 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 Security 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. These new guidelines are to ensure transparency in the allotment process.
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 and departure and the common areas with recording saved up to 180 days, according to their internal security policy.
In case of unauthorised 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 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, along 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 their locker content in case of their death, the bank will proceed to give the nominee access to 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 any other individual(s), the bank must then 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 an inventory being taken in the prescribed manner following the demise of any of the locker hirers.
If you already have a bank locker or are planning to rent one, it is advisable to be aware of the revised guidelines that the Reserve Bank of India (RBI) has issued in this connection. The new guidelines will be applicable for both new and existing users of locker facilities and cover two key issues: a term deposit that new customers will now have to pay and the responsibility of the banks.
The new rules will come into effect from January 1, 2022, except where otherwise specified, the August 8 notification said.
According to the RBI circular, the guidelines had been revised after taking into account consumer grievances, feedback from the banks, as well as "major developments" in banking and technology.
Locker rental rules
The circular noted that banks could face instances when renting the locker was not up-to-date with paying the required fees or did not manage the locker.
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 a 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 central bank made it clear that the banks could not ask their existing locker holders or those with a satisfactory operative account to cough up such term deposits.
In addition, RBI has also empowered the banks to break open any locker if the customer fails to clear the rent for three years in a row. However, banks are to follow the due procedure before taking this step.
Responsibility of the banks
RBI has also tried to shield banks from the responsibility of damage to the contents in a locker due to a natural disaster or on account of the customer's actions.
“The bank shall not be liable for any damage and/or loss of contents of locker arising from natural calamities or Acts of God, like earthquake, floods, lightning, and thunderstorm, or any act that is attributable to the sole fault or negligence of the customer,” RBI "aid.
However, banks are required to have in place a board-approved policy outlining their responsibility in case a locker has been damaged due to their negligence.
For instance, they have to take appropriate steps to ensure their locker systems are protected from such catastrophes.
They will also have to include an additional clause in the locker agreements prohibiting the customer 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.
Currently, the rent of lockers depends on the bank, the location of the branch and the size of the locker, which come in three sizes - small, medium and large. State Bank India's rent ranges from Rs 1,000 for a small safe at a rural branch to Rs 9,000 for a large locker at metros. In addition, customers have to pay GST for this facility.
A new locker agreement
With the operational standards being implemented from January 1, 2022, a new locker agreement shall come into place with the bank for safe deposit locker holders. This is done to make locker holders eligible for the new pay.
Banks can use the IBA-drafted model locker agreement, which must comply with the updated instructions and the Supreme Court’s directives, as stated in the RBI notification.
Banks must ensure that their locker agreements do not incorporate any unfair terms or conditions and see to it that the terms are not more onerous than required while safeguarding the interests of the bank. As per the RBI notification, banks must also renew their locker agreements with existing customers by January 1, 2023.
Email and SMS alerts
Banks must notify their customers on their registered email address and phone 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 unauthorised 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 Security 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. These new guidelines are to ensure transparency in the allotment process.
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 and departure and the common areas with recording saved up to 180 days, according to their internal security policy.
In case of unauthorised 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 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, along 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 their locker content in case of their death, the bank will proceed to give the nominee access to 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 any other individual(s), the bank must then 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 an inventory being taken in the prescribed manner following the demise of any of the locker hirers.
