The Reserve Bank of India had set December 31, 2023, as the deadline for all banks to get all locker holders to sign a revised bank locker agreement. The central bank has specified that bank locker holders are required to endorse a revised version supplied by their respective banks and ensure its submission before the specified deadline.
The central banks had asked the banks to be ready with stamp papers, electronic execution of agreement, e-stamping, etc. and provide a copy of the executed agreement to the customer.
Earlier, the deadline to sign and complete the revised locker agreements was December 31, 2022. But on January 23, 2023, the central bank extended the deadline, saying they noticed that many customers still haven’t signed the new agreement and are having trouble doing so.
“Banks were required to renew their locker agreements with existing locker customers by January 1, 2023. However, it has come to the notice of the Reserve Bank that a large number of customers are yet to execute the revised agreement and are facing difficulties in doing the same. In many cases, the banks are yet to inform the customers about the need for renewal of agreements before January 1, 2023. Further, there is a need for revision in the Model Agreement drafted by the Indian Banks’ Association (IBA) to fully comply with the revised instructions. 3. Considering the above aspects, the deadline for banks is being extended in a phased manner to December 31, 2023,” the RBI said in the circular issued on January 23, 2023.
The central bank had also said the lockers that had been locked due to non-execution of agreement by January 1, 2023, (the previous deadline), should be unfrozen immediately.
The RBI in its guidelines, communicated through the Indian Bank Association (IBA), said the implementation is staggered, with banks expected to reach 50 per cent compliance by June 30; 75 per cent by September 30; and 100 per cent by the end of this year.
So 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.
According to a report in the Times of India, banks said that while the majority have completed the formality, 10-20% of customers are yet to finish the paperwork. A Union Bank spokesperson told TOI that 80% of the customers had executed the new locker agreement. However, it has not introduced any digital execution of the agreement.
On the other hand, Canara Bank said that over 90% of its customers have signed the updated locker agreement, while the corresponding number for Bank of Baroda stood at 81%.
The Reserve Bank of India (RBI) had framed new rules for bank safe deposit lockers in response to a Supreme Court order in 2021. The order asked the RBI to redefine the responsibilities and liabilities of banks and their locker users. The newly framed rules entail several modifications concerning the bank’s responsibility towards locker users.