If you are planning to get a safe deposit locker in a bank, the rental charge to be paid upfront has gone up and the terms are now tougher. The Reserve Bank of India (RBI) in its new instructions for lockers in banks has stated that to ensure prompt payment of locker rent, banks would be allowed to take a "Term Deposit", at the time of allotment of a locker.
This would cover three years’ rent and the charges for breaking open the locker in case of such eventuality.
Banks, however, can exercise their discretion and not insist on such Term Deposits from the existing locker holders or those who have a satisfactory operative account.
However, in a move that would bring relief for bank customers, the RBI has made it mandatory for banks to settle the claims of deceased locker, hirers and release contents of the locker to survivor(s)/nominee(s), within a period not exceeding 15 days from the date of receipt of the claim. This is subject to submission of proof of death of the depositor and suitable identification of the claimant(s) with reference to the nomination, to the bank's satisfaction.
Customer Due Diligence
The existing customers of a bank who have applied for a locker facility and who are fully compliant with the criteria of Know Your Customer (KYC) Directions, may get the facilities of safe deposit lockers/safe custody article.
Customers who do not have a relationship with a bank can hire a safe deposit locker/safe custody article after complying with the criteria under the Master Direction Know Your Customer (KYC) Directions.
Banks have to carry out due diligence for all the customers in whatever capacities they are going to hire a locker.
With rising complaints of lockers being used to stash illegal goods and assets, the RBI has asked banks to incorporate a clause in the locker agreement that the locker-hirer/s shall not keep anything illegal or any hazardous substance in the safe deposit locker.
In case a bank suspects the deposit of any illegal or hazardous substance by any customer in the safe deposit locker, the banks now have the right to take appropriate action against such customers.
Model Locker Agreement
The nudge for fixing the rules came from the Supreme Court in February this year. The SC had asked RBI to lay down regulations in six months for locker facility management in banks.
With rising cases of locker heists, banks have been asked by the RBI to take necessary steps to ensure that the area in which the locker facility is housed is properly secured to prevent criminal break-ins.
The risks of accessibility of an allotted locker from any side without the involvement of the locker-hirer concerned may be assessed and kept on record. Banks should have a single defined point of entry and exit to the locker room/vault.
The place where the lockers are housed must be secured enough to protect against hazards of rain/flood water entering and damage of lockers in contingent situations. The risks posed by fire hazards in the area should also be assessed and minimised.
Banks also have to now cover the entry and exit of the strong room and the common areas of operation under CCTV cameras and preserve its recording for a period of not less than 180 days. In case any customer files a complaint at the bank that his/her locker was opened without their knowledge, or any theft or security breach is noticed, the bank has to preserve the CCTV recording till the police investigation is completed and the dispute is settled.