RBI extends the deadline for the new bank locker contract; review the specifics

By December 31, 2023, you can now sign a new bank locker arrangement. This is due to the Reserve Bank of India extending the deadline till the end of this year as a result of banks' failure to sign a new agreement with their customers by January 1, 2023. "A considerable number of clients have yet to sign the new agreement, which has come to RBI's attention. Banks frequently haven't told their consumers that they must take certain actions before the deadline. As a result, it has been decided to extend the deadline for banks to finish the process of renewing the contracts for the current safe deposit lockers in a phased manner by December 31, 2023, with intermediate milestones of 50% by June 30, 2023, and 75% by September 30, 2023, according to an RBI circular. Operations in lockers that have been frozen due to non-execution of an agreement must be unfrozen as soon as possible. Additionally, banks have been urged to make the required preparations to speed up the execution of the updated agreements by assuring the availability of stamp papers, among other things, according to the RBI.

The updated rules took effect for new customers in January 2022 and were applicable to current customers starting in January 2023. According to the new locker agreement, there cannot be any customer-unfair elements in the new agreement.

Banks must have an agreement for safe deposit lockers that has been approved by the board, according to the RBI notification from August 18, 2021. Banks may use the model locker agreement that the IBA will draught for this purpose. This agreement must follow both these updated instructions and the relevant directions from the Honorable Supreme Court. Banks are required to make sure that their locker agreements don't contain any unreasonable terms or conditions. The contract's conditions must also not be any stricter than what is necessary in the regular course of business to protect the bank's interests. By January 1, 2023, banks must renew their contracts with current locker users.

One of the key provisions states that in the event that a bank is held liable for something like a fire, theft, burglary, robbery, dacoity, building collapse, or fraud committed by bank employees, the amount of their liability must be equal to 100 times the annual safe deposit locker rent as it is currently set. It must take care to prevent incidents like fire, theft, burglary, robbery, dacoity, and building collapse from happening on the bank's property as a result of flaws, negligence, or any other act of omission or conduct. As banks cannot claim that they have no responsibility to their customers for the loss of the contents of the locker, their liability shall be limited to an amount equal to 100 times the annual rent of the safe deposit box in cases where the loss of the contents of the locker is caused by one of the aforementioned incidents or by fraud committed by one or more of their employees. According to the agreement, "banks shall clarify in their locker agreement that they would not be under any liability to insure the contents of the locker against any risk whatsoever as they do not keep a record of the contents of the locker or of any articles removed from or placed therein by the customer. Banks may not, under any circumstances, directly or indirectly, offer any insurance product to customers who rent lockers for contents insurance.

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