RBI issues security guidelines, authorizes banks to open unoperated lockers

In a decision that may have repercussive effects, India's central bank, the Reserve Bank of India (RBI), has authorized banks to break open lockers if they remain unoperated for over one year.

"In case the locker remains unoperated for more than one year, the bank would have the right to cancel the allotment of the locker and open the locker, even if the rent is paid regularly," the RBI said in fresh guidelines issued to tackle increasing security threat. Recently, explosives and weapons were found in a bank locker giving rise to concerns of national security and safety.

However, the directive comes with a condition: the banks will have to give notice to the customer asking the reason for the inoperation of the locker before opening it.

It has asked the banks to contact the locker hirers, who have not operated the lockers for one year (in case of higher risk customers) or three years (in case of medium risk customers), to either operate the locker or surrender it.

This exercise should be carried out even if the locker hirer is paying the rent regularly.

Further, banks should ask the locker hirer to give in writing, the reasons why he or she did not operate the locker. In case the locker–hirer has some genuine reasons as in the case of NRIs or persons who are out of town due to a transferable job banks may allow the locker hirer to continue with the locker. In case the locker–hirer does not respond nor operate the locker, banks should consider opening the lockers after giving due notice to him.

RBI has asked banks to insert a clause of this note in the locker agreement.

RBI has also asked the banks to follow the Know Your Customer (KYC) guidelines strictly before allotting lockers.

The central bank has also asked banks to refrain from insisting on fixed deposits beyond the permitted limit for issuing lockers.

The banks, however, may obtain a fixed deposit at the time of the allotment of lockers to cover three years rent and charges for breaking open the locker in case of an eventuality, the RBI guidelines said.

To further streamline the procedure, the RBI has asked bankers to maintain a waitlist for the purpose of allotment of lockers and maintain transparency in the procedure. It also asked them to acknowledge all applications received for opening lockers and give a wait–list number to them.

RBI asked banks to adhere to the KYC norms in respect of the nominees also. The central bank has also advised bankers not to ask for any type of succession certificate or indemnity bond from the survivor or the nominees in case of the death of a locker–hirer for giving them access to the lockers.

In case where the deceased locker hirer had not made any nomination, banks should adopt a customer–friendly approach and give the access of the deceased's locker to legal heirs. Similar procedure should be adopted for the articles under safe custody of the bank, the guideline said.

RBI has also advised the Indian Banks' Association (IBA) to formulate a simple model operational procedure (mop) for settlement of claims of the deceased locker–hirer.