Important Changes in Bank Locker Rules You Should Know and Its Implication

As we know, in order to open a bank locker, you are required to submit an application to the bank, which mentions your preferred locker size. If your preferred size is not available, the bank will keep you on a waiting list and contact you once it is available. Whereas, if it is available, you have to sign a locker agreement with the bank and choose the locker from the available ones. To avail of the locker facility, you need to open a security deposit with the bank and pay the applicable annual rent in advance, which differs from the bank branch and locker size. The locker agreement includes the locker rents and all the terms and conditions related to the locker issuance, operation, closure, and the bank's responsibilities and customers related to locker operations.

Since the bank vaults and lockers are well built and have multiple layers of security systems, they are generally considered the safest place to keep all your valuables. However, although a Bank Safe Deposit Locker can be safer than your home, it is certainly not the safest place. There have been many incidents of loss of contents of the Safe Deposit Lockers due to bank lockers robbery, theft, burglary, natural calamities, etc.

To overcome this, the Reserve Bank of India (RBI) issued a notification on 18th August 2021 that banks cannot disown liability for loss of locker contents due to theft or fraud by its employees. However, the bank's liability in case of such loss is limited to 100 times the prevailing annual rent of the hired locker. This amount could be minimal compared to the precious items that most people keep in the locker.

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In case of damage or loss to the locker's contents due to natural calamities like earthquake, lightning, flood, thunderstorm, etc., or customer negligence, the bank will not be liable. The RBI has asked all the banks to clearly inform the hirers in advance that the bank is not responsible for insuring the contents of the locker. Moreover, to prevent coercive insurance selling, the RBI has prohibited banks from selling locker contents insurance to their locker customers. However, banks shall exercise appropriate care to their locker systems to prevent their premises from any catastrophe.

The RBI also mentioned, "It is the responsibility of the banks to take all the necessary 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 shortcomings, negligence and by any act of omission/commission."

Although these guidelines are implemented by banks from 1st January 2022, the hirers were asked to sign a new Locker agreement with the bank from August 2021 itself to be eligible for the new compensation. The banks were asked to renew the locker agreements with the existing hirers by 1st January 2023. The central bank said, "The banks shall ensure that any unfair terms and conditions are not incorporated in their locker agreements.".

The central bank has also made it mandatory for banks to install CCTVs to monitor locker rooms. Moreover, it has also been made mandatory to keep the data of CCTV for at least 180 days to help in checking if there is any discrepancy. In case a customer has complained about theft or loss of their belongings from the locker, the bank has to keep the CCTV footage until the police investigation is completed.

For extra security and to avoid fraud, the RBI has mandated banks to send email and SMS confirmation to the locker holders every time the locker is operated.

The banks need to ensure that the bank and branch identification code is imprinted on the locker key for easy identification in case of an emergency. Also, if a bank is using an electronic locker register, it has to take extra precautions to ensure the system is secure against security breaches. The banks have to ensure that their electronically controlled lockers comply with the RBI's Cyber Security Framework and keep permanent records of the locker operations.

Apart from the safety and security guidelines, the central bank has also provided guidelines to ensure transparency in locker allocation. It was observed that many banks were hiding the locker information from the customers, and lockers were allotted to the special customers who were ready to make high deposits or purchase insurance policies from the banks. However, with new guidelines, banks have to accept all the locker applications, display the information related to the empty lockers and waiting list on the display board of the branch, and provide the waiting list numbers to the interested customers.

Besides, although banks can still accept the term deposits as a security, the banks cannot insist you buy any third-party products like life insurance, health insurance, mutual funds, etc.

In Conclusion:

These major changes in the bank locker rules were necessary as there was frequent news of bank locker thefts and frauds in recent years. The RBI has certainly understood the pain of the locker customers and provided guidelines to give confidence to the existing and new locker customers. So, now banks cannot simply deny their responsibility for bank locker thefts and allocate lockers to their preferred customers.

Warm Regards,
Ketki Jadhav
Content Writer