New Bank Locker Rules - How locker customers will be impacted ?


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Sunday, 9 January 2022

New Bank Locker Rules - How locker customers will be impacted ?

If you are having an existing locker with any banks or plan to rent one to store your valuables in a bank locker, then you should be aware of the new bank locker rules laid out by the Reserve Bank of India (RBI) that came into effect on January 1, 2022. The RBI announced the new guidelines via a notification on August 8, 2021. 

Check out the revised guidelines for bank lockers and its impact on locker users, as per the RBI notification.

New Bank Locker Rules 2022

When the bank will compensate customers

RBI has introduced the compensation for locker hirer. Now onwards banks will be eligible to pay in case of any loss of locker content resulting from the bank's negligence.

The RBI notification says: "It is the responsibility of banks to take all steps for the safety and security of the premises in which the safe deposit vaults are housed. It has the responsibility to ensure that incidents like fire, theft/ burglary/ robbery, dacoity, building collapse do not occur in the bank's premises due to its own shortcomings, negligence and by any act of omission/commission. As banks cannot claim that they bear no liability towards their customers for loss of contents of the locker, in instances where loss of contents of locker are due to incidents mentioned above or attributable to fraud committed by its employee(s), the banks' liability shall be for an amount equivalent to one hundred times the prevailing annual rent of the safe deposit locker."

When the bank will not compensate

As usual, the bank will not be liable for any damage or loss of locker contents caused by natural calamities or acts of God such as earthquakes, floods, lightning, or thunderstorms, or any act attributable to the customer's sole fault or negligence, according to the revised guidelines. It is also advised to Banks, to take reasonable precautions with their locker systems in order to secure their facilities from such disasters.

New locker agreement by January 1, 2023

While banks will begin implementing operational standards on January 1, 2022, It is decided that safe deposit locker holders will need to execute a new locker agreement with the bank in order to be eligible for the new pay.

Banks are free to use the IBA-drafted model locker agreement. According to the RBI notification, this arrangement must comply with the updated instructions as well as the Supreme Court's directives 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,” added the notification.

SMS and email alerts about locker access and operation

Banks to notify before the end of the day, by sending an email and SMS alert to the customer's registered email address and mobile number as a positive confirmation, informing them of the date and time of the locker operation, as well as the redressal mechanism available in the event of unauthorised locker access.

More transparent locker allotment

Due to banks' lack of transparency and opaque methods, the process of obtaining a new locker has been a source of frustration for customers. Many banks failed to disclose the correct inventory status to a new locker seeker and used this as a technique to persuade consumers to purchase investment products. The new guidelines, on the other hand, are expected to change this.

For the purpose of allotment of lockers and to guarantee transparency in allotment of lockers, banks shall maintain a branch wise list of vacant lockers as well as a wait-list in their Core Banking System (CBS) or any other computerised system consistent with the RBI's Cyber Security Framework. If lockers are not available for allotment, the banks must acknowledge receipt of all applications for locker allotment and provide consumers with a wait list number.

Banks will continue to accept term deposits in order to collect locker rent

In banks, it is common to practise to get a significantly higher term deposit than is required to recover the annual locker rental. The new guideline clarifies his stance.

“To ensure prompt payment of locker rent, banks are allowed to obtain a Term Deposit, at the time of allotment, which would cover three years' rent and the charges for breaking open the locker in case of such eventuality. Banks, however, shall not insist on such Term Deposits from the existing locker holders or those who have satisfactory operative account. The packaging of allotment of locker facility with placement of term deposits beyond what is specifically permitted above will be considered.

CCTV footage of locker operation

If their risk assessment indicates that it is necessary, the banks must implement an Access Control System that will prevent unlawful entry and create a digital record of locker room access with a time log. Banks may cover the entry and departure of the strong room, as well as the common areas of activity, with CCTV cameras, and save the recordings for at least 180 days, according to their internal security policy.

If a customer complains to the bank that his or her locker has been entered without his or her knowledge or consent, or that there has been a theft or security breach, the bank will keep the CCTV recording until the police investigation is concluded and the issue is resolved.

Keys must be easily distinguishable.

Banks must ensure that the bank's / branch's identification code is imprinted on all locker keys in order for law enforcement agencies to identify lockers and locker owners in the event of an emergency.
Safe to access electronic locker.

If the lockers are controlled by an electronic system, the bank must take reasonable precautions to ensure that the system is secure against hacking or other security breaches. The Reserve Bank has mandated that banks verify that electronically controlled lockers comply with the Reserve Bank's Cyber Security Framework. The system should be able to keep a permanent record of locker actions.

Transfer of content if the account holder dies

If the sole locker hirer nominates an individual to receive the contents of the locker in the event of his death, the banks shall give such nominee access to the locker with the liberty to remove the contents after an inventory is taken in the prescribed manner, after verification of the death certificate and satisfying the identity and genuineness of such individual approached.

If the locker was hired jointly with instructions to operate it under joint signatures and the locker hirer(s) nominates any other individual(s), the bank shall give access to the locker and the liberty to remove the contents jointly to the survivor(s) and the nominee(s) after an inventory was taken in the prescribed manner in the event of death of any of the locker hirers.

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