Today's Editorial

Today's Editorial - 20 February 2023

Bank Locker Agreements

Source: By Hitesh Vyas: The Indian Express

In a major relief to customers, the Reserve Bank of India (RBI) on 23 January 2023 extended the deadline for banks to complete the process of renewal of agreements for existing safe deposit lockers/safe custody article facilities in a phased manner till 31 December 2023, from an earlier deadline of 1 January 2023.

The RBI has also asked the Indian Banks Association (IBA) to review the model locker agreement and send it to banks by 28 February 2023.

By when can customers renew their existing agreements?

RBI has extended the deadline for banks to renew locker agreements with existing locker customers in a phased manner to 31 December 2023. The central bank has asked banks to inform all their existing locker customers about the renewal requirement by 30 April 2023. Banks will have to ensure that at least 50 per cent of their existing locker customers have renewed agreements by 30 June and 75 per cent by 30 September 2023.

How will banks aid customers?

The RBI has advised banks to facilitate execution of the fresh/supplementary stamped agreements by taking measures such as arranging stamp papersfrankingelectronic execution of agreements and e-stamping, among others. Lenders will provide a copy of the executed agreement to customers.

Why did the RBI extend the timeline?

In August 2021, the RBI, in a circular, directed banks to renew these agreements by 1 January 2023. However, in a recent review, the RBI found that a large number of customers were unable to renew locker agreements and were having difficulties in executing the same.

In many cases, banks did not inform customers about the need to renew locker agreements before 1 January 2023. The deadline has also been extended as the RBI was of the opinion that the model agreement drafted by the IBA needs a revision to fully comply with the revised instructions issued in August 2021.

What happens to customers whose locker operations have been frozen?

In the absence of the execution of revised locker agreements by 1 January 2023, a few banks had frozen locker operations of some customers. RBI has asked banks to lift the restrictions on such lockers on an immediate basis.


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