Bank Locker Agreement: RBI Extends Deadline to 31st December; Asks Banks To Arrange Stamp Papers
Moneylife Digital Team 28 January 2023
Paying heed to issues faced by customers, the Reserve Bank of India (RBI) has decided to extend to 31 December 2023 its deadline for renewal of agreements for existing safe deposit locker or safe custody article facilities provided by banks. RBI also asked banks to make necessary arrangements to facilitate the execution of the revised agreements by ensuring the availability of stamp papers. Banks are also directed to unfreeze lockers that may have been frozen for non-execution of the agreements. RBI also asked Indian Banks' Association (IBA) to review and revise the model agreement for the renewal of bank locker agreements.
 
In a circular, RBI says, "...it has been decided to extend the deadline for banks to complete the process of renewal of agreements for the existing safe deposit lockers in a phased manner by 31 December 2023, with intermediate milestones of 50% by 30 June 2023, and 75% by 30 September 2023. Further, banks have been advised to make necessary arrangements to facilitate execution of the revised agreements by ensuring the availability of stamp papers."
 
"Further, in cases where operations in lockers have been frozen for non-execution of agreement by 1 January 2023, the same shall be unfrozen with immediate effect. Necessary instructions in this regard have been issued to the banks," it added.
 
RBI has also asked banks to take measures to facilitate the execution of fresh or supplementary stamped agreements for lockers. It includes banks arranging stamp papers, franking, electronic execution of the agreement, and e-stamping and providing a copy of the executed agreement to the customer.
 
In its revised instructions issued through a circular on 18 August 2021, RBI had asked banks to enter into revised agreements with the existing locker-holders by 1 January 2023. "However, 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. Further, there is a need for revision in the model agreement drafted by IBA to fully comply with the revised instructions."
 
RBI says it has asked IBA to review and revise the model agreement to ensure that it complies with the requirements of the circular issued on 18 August 2021 and circulate a revised version to all banks by 28 February 2023.
 
According to the central bank, there may be instances where the revised agreements already executed in pursuance of the 18 August 2021 circular are at variance with this revised IBA model agreement.
 
In such cases, it says, "all the provisions of the said circular of the RBI, in particular Part VII thereof on compensation policy and liability of banks, shall continue to apply to banks even if not explicitly stated in the agreements already executed. Further, in such cases, banks shall have the option to execute fresh agreements or revise them through supplementary agreements. The cost of stamp paper in such cases may be borne by the banks."
 
However, there is no word from RBI about the value of the stamp paper required for executing the renewal agreement for bank lockers. This, as reported by Moneylife, was one of the main issues faced by bank customers.
 
For example, many customers told Moneylife that several banks in one location (state) are demanding stamp paper valued at Rs100 to Rs600 for the locker agreement. Besides this, branches of the same bank are also asking customers to use stamp papers with different denominations. Since each state has its stamp valuation system, there may be some differences between the stamp paper valuation for a bank branch in one state and the same bank's branch in another. However, even in the same state, we found branches of the same bank demanding stamp papers with different denominations. Further, many locker-holders are complaining that they are not given a copy of the agreement from the bank. (Read: Bank Lockers: Customers Harassed due to Lack of Standard Value of Stamp Paper for Agreement)
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