Banks may ask you to renew your locker agreements before June 30, 2023. Read on to know what it means for bank customers
According to the Reserve Bank of India (RBI), new rules for safe deposit lockers require customers to sign a new agreement with their banks. By June 30, 2023, the bank must renew the agreements of at least 50 per cent of its customers. As this deadline holds near, you may also be asked to renew your contract.
The changes come after a 2021 Supreme Court ruling that clarified the responsibilities and liabilities of both banks and their locker users. Under the old norms, banks acted as custodians of the locker and assumed a larger liability in the event of damage to stored items.
However, the new regulations redefine the relationship between the bank and the locker user as that of a lessor and lessee. Banks will give their customers the right to use locker space, as long as it is not misused.
The new rules also define what can and cannot be stored in lockers, with users held responsible for any violations.
Locker Rules And Regulations
Customers are only allowed to use the locker as long as they pay the rent. New safe deposit locker agreements have been introduced by banks, specifying that customers can only use lockers for legitimate purposes, such as storing jewellery and documents.
The agreement now prohibits the storage of any cash or currency. Further arms, weapons, drugs, contraband, perishable or radioactive materials or any material that could create a hazard or nuisance to the bank or customers cannot be stored. The customer’s license to use the locker is non-transferable and only for their own use.
The rules state that if bank suspects the deposit of any illegal or any hazardous substance in the safe deposit locker, the bank can inspect the locker and take appropriate action against such customer as it deems fit.
Bank customers will not be subject to locker inspections unless there are grounds to believe they are storing articles disallowed under the regulations. Even then, the locker can only be opened in the presence of the client.
The new Indian Banks’ Association’s model agreement also holds customers responsible for any misuse of the key or password to access the locker, and the bank will not be held responsible for any unauthorised use. While customers have the right to expect reasonable care by the bank in protecting their belongings, they may seek legal remedies if the bank fails to do so.
While the new rules do not necessitate higher fees, and stipulate that banks will have to bear the cost of documentation, it remains to be seen if banks will devise some ways to pass on the cost to consumers. To ensure transparency, new and existing customers will sign a locker agreement with the
bank on stamp paper. The cost of documentation will be borne by the bank, and the agreement will include details of the user and bank’s rights and duties, locker rent, escalation clauses, and more.
The deadline for the agreement is December 31, 2023. The new norms apply to both existing and new users from the deadline. RBI has also asked banks to ensure that by June 30 and September 30, 50 per cent and 75 per cent of existing customers, respectively, have signed the new agreement.