The Reserve Bank of India (RBI) had issued a notification on August 18, 2021, revising the instructions for ‘Safe Deposit Locker/Safe Custody Article Facility provided by the banks. The revisions mainly related to the enhancement of safety and security aspects, the need for a model locker agreement, and the disclosure of terms and conditions on the websites of banks.
The revised instructions came into force on January 1, 2022 and were applicable to both new and existing safe deposit lockers and safe custody article facilities with the banks. In addition, banks were given time until January 1, 2023, to renew their locker agreements with their existing customers.
Banks are required to have a board-approved locker agreement in accordance with the revised instructions and directions issued by the Supreme Court. Banks were given the option of utilising the Model Locker Agreement created by the Indian Banks’ Association (IBA). Banks must avoid unfair terms or conditions and abstain from making the contracts more onerous than required in the ordinary course of business to safeguard their interests. The instructions require a duly stamped paper agreement to be entered by the bank, with the locker-hirer furnishing him a copy and retaining the original.
Apart from the agreement, other changes introduced earlier this year included enhanced standards of safety and security of lockers, detailed procedures for the discharge of locker contents by breaking them open under various circumstances and an alert facility through registered email/SMS for locker operations. The banks have been made liable to the extent of 100 times the annual locker rent in case of negligence or fraud committed by the bank employees leading to the loss of the contents of the locker.