In a revised guideline regarding bank lockers, the Reserve Bank of India (RBI) has said that banks will have to pay in case there is any loss of locker content owing to its negligence. The guidelines came into effect on January 1, 2022.
The RBI notification states: “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.”
The bank will have to pay 100 times the annual rent of the locker. The notification explained that if the loss is due to the reasons mentioned above or “attributable to fraud committed by its employees, the bank’s liability shall be for an amount equivalent to one hundred times the prevailing annual rent of the safe deposit locker”. This means, if the annual rent was, say, Rs 10,000, the bank will have to pay Rs 10 lakh.
The mandate comes thanks to the case ‘Amitabha Dasgupta vs United Bank of India’, on which the Supreme Court passed a ruling on February 19, 2021 (the appellant had claimed that his joint locker with his mother was broken even though the fee was paid and some of the ornaments were missing).
During the proceedings of this case, the Supreme Court (SC) directed the RBI to issue suitable rules and regulations on the responsibility of banks on different aspects of safe deposit lockers within six months.
More Information On Availability
The central bank has implemented a few other rules as well.
With the new set of changes, banks will have to maintain a centralised repository of available lockers and make that accessible to customers. Usually, banks allocate lockers on the basis of the availability in a given branch. The branch may have little to no visibility on lockers in nearby branches. Having a centralised repository means that banks as well as customers will have better visibility into availability of lockers. This can help them take a more informed decision.
“One of the key rules about bank lockers is that banks can require you to hold a term deposit whose value would cover three years’ locker rent and any charges for breaking open the locker in case of such an eventuality. While this is not required for existing locker holders with a satisfactory operative account, you may be asked to furnish such a term deposit when you opt for a new locker,” says Adhil Shetty, CEO, BankBazaar.com. This means, that if you apply for a locker and the annual rent of that is, say, Rs 8,000, the bank may ask you to open a term deposit of Rs24,000-plus.
Things To Keep In Mind
Often, since lockers are not always easily available, customers approach various banks just so that they can find a locker. As these are new-to-bank customers, the bank does not have much visibility into their financial habits. Therefore, as a precaution, the bank asks for a term deposit as security against locker fees. However, as there was no set way to calculate how much term deposit should be kept, different banks went with different benchmarks. With the RBI standardising the conditions for bundling term deposits with lockers, customers will now be clear about how much they would need to park with the bank to get a locker.