Banks can only obtain from customers a time deposit that covers three years’ rent and charges for breaking open the locker
In order to ensure prompt payment of locker rent, the Reserve Bank of India (RBI) has directed banks to obtain a term deposit, at the time of allotment, which would cover three years’ rent and the charges for breaking open the locker. Banks, however, will not insist on such term deposits from existing locker holders or those who have satisfactory operative account. If the customer surrenders the locker, the proportionate amount of advance rent collected from the customer will be refunded to him.
Experts say banks cannot insist that customers looking for a locker obtain a term deposit of higher amount, buy a life insurance product or any other products sold by the bank. The central bank’s notification clearly underlines that the packaging of allotment of locker facility with placement of term deposits beyond what is specifically permitted will be considered as a restrictive practice.
Banks will have to send an email and SMS alert to the registered email ID and mobile number of the customer before the end of the day about the date and time of the locker operation and the redressal mechanism available in case of unauthorised locker access.
The revised instructions, which come into effect from January 1, 2022, underlines that banks will have to maintain a branch-wise list of vacant lockers as well as a wait-list in the core banking system to ensure transparency in locker allotment. The banks will acknowledge the receipt of all applications for allotment of locker and provide a wait list number to customers, if lockers are not available for allotment.
Banks will adopt a model locker agreement to be framed by IBA and ensure that any unfair terms or conditions are not incorporated in their locker agreements. Banks will have to renew their locker agreements with existing locker customers by January 1, 2023. A copy of the locker agreement in duplicate signed by both the parties will have to be given to the locker-hirer to know his/her rights and responsibilities.
The existing customers of a bank who have made an application for locker facility and are fully compliant with the customer due diligence criteria will be given the facilities of safe deposit lockers. Also, customers who do not have any other banking relationship with the bank will be given the facilities of safe deposit locker after complying with the customer due diligence criteria.
All banks have to incorporate a clause in the locker agreement that the locker-hirer will not keep anything illegal or any hazardous substance in the safe deposit locker. If the bank suspects deposit of any illegal or hazardous substance by any customer in the safe deposit locker, the bank can take appropriate action against such customer. The banks will have to ensure that the identification code of the bank / branch is embossed on all the locker keys.
If the lockers are being operated through an electronic system, the bank will ensure that the system is protected against hacking or any breach of security. The customers’ personal data, including their biometric data cannot be shared with third parties without their consent. Further, banks must ensure the electronically operated lockers are compliant with the Cyber Security Framework prescribed by RBI. The system should be capable of maintaining unalterable log of locker activities.
As per the new guidelines, if the locker remains inoperative for a period of seven years and the locker-hirer cannot be located, even if rent is being paid regularly, the bank can transfer the contents of the locker to their nominees/legal heir or dispose of the articles in a transparent manner. The banks shall ensure that appropriate terms are inserted in the locker agreement specifying the position if the locker is not in operation for a long period.