The Reserve Bank of India (RBI) on August 18 issued revised instructions on safe deposit locker and safe custody article facility provided by banks. The central bank took into consideration various developments in banking and technology, consumer grievances and feedback from banks and the Indian Banks’ Association (IBA) to issue the revised guidelines.
The revised instructions will come into effect from next year, RBI had said. Customers not having any banking relationship with the bank may be given the facilities of safe deposit locker/safe custody article after complying with customer due to diligence criteria, the central bank said in a circular.
Now, let’s take a look at RBI’s new guidelines for bank lockers
Locker Rent
• Banks may face potential situations where the locker-hirer neither operates the locker nor pays the rent. 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 accounts.
• If locker rent is collected in advance, in the event of the surrender of a locker by a customer, the proportionate amount of advance rent collected shall be refunded to the customer.
• If there is an event such as merger/closure/shifting of branch warranting physical relocation of the lockers, the bank shall give public notice in two newspapers (including one local daily in vernacular language) in this regard and the customers shall be intimated at least two months in advance along with options for them to change or close the facility.
• In case of unplanned shifting due to natural calamities or any other such emergency situation, banks shall make efforts to intimate their customers suitably at the earliest.
Compensation Policy / Liability for Banks
• The banks shall put in place a detailed Board approved policy outlining the responsibility owed by them for any loss or damage to the contents of the lockers due to their negligence as banks owe a separate duty of care to exercise due diligence in maintaining and operating their locker or safety deposit systems.
• The duty of care includes ensuring proper functioning of the locker system, guarding against unauthorized access to the lockers and providing appropriate safeguards against theft and robbery.
• Liability of banks arising from natural calamities like earthquakes, floods, thunderstorms, lightning etc. or due to sole negligence of the customer.
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• 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. Banks shall, however, exercise appropriate care to their locker systems to protect their premises from such catastrophes.
• 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 the 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.
Settlement of claims in case of death of a customer
The RBI said the banks shall have a Board approved policy for settlement of claims. It has also asked the banks to formulate policy for nomination and release of contents of safety lockers/safe custody articles to the nominee and protection against the notice of claims of other persons.
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