The apex banking regulator has made it mandatory for all banks in the country to follow the revised bank locker regulations. The amendments made by the Reserve Bank of India regarding lock-in arrangements have come into effect from January 1, 2023.
What’s the whole story?
Effective management of safe deposits, transparency and security are key concerns of the RBI, and therefore, to enhance security, transparency and safe deposit management, the Reserve Bank of India has revised its guidelines for banks. The RBI has published a list of guidelines with effect from January 1, 2023.
These guidelines apply not only to new safe deposit lockers but also to existing safe deposit lockers and other banking facilities.
To comply with these guidelines of the apex banking regulator, RBI, banks across the country must renew their agreements with locker users, latest by January 1, 2023.
The guidelines come after a landmark case in the Supreme Court (Amitabha Dasgupta vs United Bank of India, February 2021).
Main changes of the bank:
The provisions of the amendment relate to enhancing locker security, collection of rent, verification of transfers, management of lockers and disclosure of contents.
Post these modifications, the wardrobe must be consistent with the customer. The agreement must be made on paper with a valid stamp. A copy of the agreement must be given to both parties.
According to an RBI notification, the lock-in arrangements are required to follow the Indian Banks Association model.
RBI notification released on August 18, 2021
The notification issued by the Reserve Bank of India on August 18, 2021 reads as follows:
“Banks must ensure that any unfair terms or conditions are not included in their asset preservation contracts. Furthermore, the terms of the contract will be no more stringent than required in the ordinary course of business to protect the bank’s interests.”
The Reserve Bank of India also asked banks to extend asset preservation contracts for their customers before the first day of 2023, i.e. January 1, 2023.
As per the amendment, banks across the country will now have the freedom to accept fixed deposits at the right time of delivery to customers. The fixed deposit can cover three years’ rent. In case the tenant fails to operate or pay rent, a locker fee will also apply.
However, it is important to note that banks are not allowed to accept “term deposits” from people with existing lockers. Additionally, banks will not be able to receive “fixed deposits” from even those with “satisfactory functioning accounts”.
The main idea behind this is that these clauses will ensure timely payment of locker rental.
In addition, banks must make announcements in two newspapers and notify customers at least two months in advance in case bank branches move, merge, or close. In such a case, the bank must also give the customer the option to close or change its premises.
Furthermore, in case of taking locker rental in advance, the corresponding amount must be returned to the customer in case the account is surrendered.
Additionally, locker agreements must state that the bank does not have any liability to insure the items deposited in the locker in case of any mishap. It must also be made clear that the bank does not keep any records of the contents of the lockers. An interesting provision here is that banks are not allowed to provide any insurance products to customers to protect the contents of lockers.
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Source: pagasa.edu.vn