The RBI has extended the deadline for banks to renew locker agreements with existing customers in phases, from 01/01/2023 to 30/06/2023, 30/09/2023, and 31/12/2023, to cover 50%, 75%, and 100% of cases, respectively.
It is important to take note that, according to the amended instructions in this area that were issued by the RBI Circular of August 18, 2021, banks were required to renew their locker agreements with their existing clients before January 1, 2023. These guidelines can be found in paragraph 2.1.1 of the said Circular of RBI.
However, the RBI has found that a significant number of clients have not yet executed the new agreement and are having trouble doing so. This is something that the RBI is currently investigating. A great number of banks have not yet informed their customers that they must renew their locker agreements prior to January 1, 2023. In addition, the Model Agreement that was developed by the Indian Banks’ Association (IBA) needs to have some changes made to it in order to be fully compliant with the amended instructions that the RBI has provided regarding this matter.
In light of the concerns expressed above, the Reserve Bank of India (RBI) has extended the deadline for such compliance. The RBI has also instructed the banks to notify their customers of the revised requirements no later than April 30, 2023. Additionally, the banks have been instructed to ensure that at least fifty percent or seventy five percent of their existing customers have executed the revised agreements no later than June 30, 2023 or September 30, 2023, respectively. On a monthly basis, banks are required to disclose, via the DAKSH supervisory portal, the status of their compliance with the directives issued by the RBI.
IBA has been separately advised by the RBI to review and revise the Model Agreement to ensure compliance with the requirements of the RBI Circular dated August 18, 2021, and to distribute a revised version to all banks by February 28, 2023.
The RBI has also informed banks of cases where banks have already executed revised locker agreements with customers in accordance with the revised guidelines of the circular dated August 18, 2021. These contracts may differ from the revised IBA Model Agreement. In such cases, even if they are not expressly stated in the existing agreements, all of the provisions of the said RBI circular, particularly Part VII on compensation policy/liability of banks, will continue to apply to banks. Furthermore, banks will have the option of executing new agreements or revising existing ones through supplementary agreements in such cases. Banks may bear the cost of stamp paper in such cases.
The RBI has also advised banks to make it easier for their customers to execute fresh/supplementary stamped agreements by taking steps such as arranging stamp papers, franking, electronic execution of agreements, e-stamping, and providing a copy of the executed agreement to the customer.
Furthermore, the RBI has instructed banks that where operations in lockers have been frozen due to non-execution of locker agreements by January 1, 2023 as per revised instructions, the same should be allowed/unfrozen with immediate effect in accordance with the extended timeline.
RBI Circular dt. 23/01/2023: Timeline for Renewal of Bank Locker Agreements extended upto 31/12/2023 in a phased manner
RBI’s Revised Instructions/ Guidelines on Bank Lockers: Circular dt. 18/08/2021
The RB) has reviewed the existing guidelines/instructions relating to “Safe Deposit Lockers/Safe Custody Article Facility” offered by banks. The RBI review took into account various developments in banking and technology, the nature of consumer grievances, and feedback received from various banks/Indian Banks’ Association (IBA), Furthermore, the RBI review took into account the principles enumerated by the Supreme Court in the case of ‘Amitabha Dasgupta vs United Bank of India’.
As a result, the RBI has issued detailed revised instructions on the aforementioned subject, superseding its previous instructions issued from time to time. The RBI has advised banks to develop their own Board-approved policy/operational guidelines in this regard, taking these revised instructions into account.
The revised instructions are effective as of January 1, 2022 (unless otherwise specified) and will apply to both new and existing safe deposit lockers as well as the banks’ safe custody of articles facility.
RBI Circular dt. 18/08/2021: RBI’s Revised Guidelines/ Instructions on Bank Lockers