RBI extends locker agreement deadline to December 31. All you need to know

Renewing customer lockers in line with the new rules is a major issue that banks must address.

The Reserve Bank of India has extended the deadline for renewal of safe deposit locker agreements between banks and customers to December 31, 2023.

Many customers haven’t been able to extend their agreements with banks by the earlier deadline of January 1, 2023, due to various reasons, the central bank said on January 24. In many cases, banks haven’t informed customers about the need to renew the agreements before the stipulated date, it said.

The RBI said the deadline will be extended in phases with intermediate milestones of 50 percent by June 30 and 75 percent by September 30.

Here is an explainer on the new locker rules:

What are the new locker rules?

The RBI revised instructions for safe deposit lockers and safe custody article facilities provided by banks in an order dated August 18, 2021. Banks shall renew their locker agreements with existing locker customers by January 1, 2023, it said.

Among the changes, the RBI made it mandatory for banks to install CCTVs to monitor locker rooms and to store the footage for 180 days.

Banks were told to send SMS and email alerts every time customers accessed their lockers and when government authorities accessed a customer’s locker for security reasons.

The new rules allowed banks to demand a term deposit at the time of allocation of a locker that would be taken as rent for three years. This would not apply to existing locker holders and those with satisfactory operative accounts.

Banks were mandated to make the availability of lockers known to the public by putting up information on a display board within the premises.

They should also inform customers about the list of empty lockers and waiting list details.

Banks were mandated not to issue any unfair terms and conditions in the locker agreements.

Why has the RBI extended the deadline for renewal?

The banking regulator said in a press release on January 24 that though the deadline for renewing locker agreements expired on January 1, a majority of the customers had yet to renew their locker agreements.

“It has come to the notice of RBI that a large number of customers are yet to sign the revised agreement. In many cases, the banks are yet to inform the customers about the need to do so before the stipulated date (January 1, 2023),” the RBI said.

The deadline will be extended in a phased manner by December 31, with milestones of 50 percent by June 30 and 75 percent by September 30.

What were the RBI’s directions to banks?

To help customers renew their locker agreements, banks have been advised to facilitate the execution of the revised agreements by “ensuring the availability of stamp paper, etc.”

The central bank also ordered banks to unfreeze accounts where locker operations had been frozen for non-execution of the agreement by January 1.

What are the complaints raised by customers?

Some customers of State Bank of India, the country’s largest lender, ICICI Bank, and Union Bank had complained about difficulties they faced as banks implemented locker renewals, including signing the new agreements and the availability of stamp paper with banks.

Other customers said they were informed about the rule changes late, which created more problems for their renewals.

Will banks compensate for any loss of locker contents?

Banks won’t be liable for any damage and/or loss of contents of lockers arising from natural calamities or acts of god or any act attributable to the sole fault or negligence of the customer.

Under the new rules, banks will compensate the customer in case of any loss of locker content resulting from the bank's negligence. Banks cannot claim that they bear no liability towards customers for the loss of contents of lockers in such instances or when it is attributable to fraud committed by its employee(s).

In such cases, the banks' liability will be an amount equivalent to 100 times the prevailing annual rent of the safe deposit locker, the RBI said in its order dated August 18, 2021.