Bank Locker Renewal: How safe are cash, and jewellery after 31st December

With just a day left in the year, it's time to focus on essential tasks that can impact the security of your financial assets. The Reserve Bank of India (RBI) has mandated a phased renewal process for bank locker agreements, with a deadline of December 31, 2023. Account holders who have submitted a bank locker agreement on or before December 31, 2022, will need to sign a revised agreement and submit it to their respective bank branches.These were initially slated to come into force on January 1, 2022. Then the date was postponed to January 1, 2023, and finally to the end of this year.The new rules are expected to have an impact on the customers of all the banks in India.

What will happen if customers fail to sign the revised locker agreement by December 31, 2023?

Earlier, the RBI had said customers who fail to renew the agreement before the deadline can face restrictions as banks can deny access to the locker and impose supplementary charges.In its January 2023 circular, the RBI said it is crucial for customers to finish the process before the deadline, December 31, 2023, to avoid their bank locker being frozen.

Renewal Process and Bank Responsibilities: 

Banks have been mandated by the RBI to facilitate the execution of fresh or supplementary stamped agreements. This involves arranging stamp papers, electronic execution, franking, or e-stamping as needed. Upon execution, banks will furnish a copy of the agreement to the customer.At the outset of locker allotment, a formal agreement is entered into between the bank and the customer, signed by both parties. The original agreement is retained by the bank at the branch where the locker is located, while a duplicate copy is provided to the locker hirer.

Safety Measures and Bank Liability

The RBI places the onus on banks to ensure the safety and security of the premises housing safe deposit vaults. It's imperative for banks to take proactive measures to prevent incidents like fire, theft, burglary, or structural failures arising from their own negligence or acts of omission/commission.

Liability for Damage and Loss

Banks are absolved of liability for damage or loss of locker contents resulting from natural calamities or acts of God, such as floods, thunderstorms, earthquakes, or lightning. However, banks are expected to exercise due care in safeguarding lockers from such catastrophic events. The customer bears responsibility for any loss or damage to locker contents caused by their fault or negligence, as per the RBI.

Compensation and Customer Rights

Should banks be held accountable for any loss or damage to locker contents, they are obligated to compensate the customer. It remains the bank's duty to ensure the safety and security of lockers and their premises. Customers have the right to be informed about their rights and responsibilities through the signed locker agreement, as stipulated by the RBI.