If you have already submitted an amended bank locker agreement on or before December 31, 2022, chances are that you may have to sign and submit a revised locker agreement again. This is because the Reserve Bank of India (RBI) has asked banks to ensure that the submitted locker agreements are based on the revised model agreements reviewed by the Indian Banks' Association (IBA). This diktat came via a circular on January 23, 2023.
The RBI issued the circular after it realised that many banks had not mentioned the compensation policy or liability of banks in certain scenarios such as fire, theft or burglary in the newamended bank locker agreement which they got signed from their customers. A RBI notification dated August 18, 2021, states that banks are liable to pay compensation of 100 times the prevailing annual locker rent wherever the customer faces a loss due to the negligence of banks. Banks are not liable to pay compensation due to natural calamities or acts of God such as earthquakes or floods.
The August 2021 circular states that the new locker agreement must not have any clauses that are unfair to the customers.
According to the latest central bank's circular, "The IBA is being advised separately to review and revise the Model Agreement to ensure that it complies with the requirements of circular dated August 18, 2021, and circulate a revised version to all banks by February 28, 2023. There may be instances, where the revised agreements already executed in pursuance of circular dated August 18, 2021, are at variance with this revised IBA Model Agreement. In such cases, all the provisions of the said circular of the RBI, in particular Part VII thereof on compensation policy/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."
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In the absence of a compensation clause in the bank locker agreement, the bank may ask you to visit the branch to sign and submit a revised locker agreement.
Mukesh Chand, Senior Counsel, Economic Laws Practice, says, "With regard to the need of execution of fresh agreement by the customers who have already entered into a locker agreement after the RBI guidelines of August 2021, the RBI has clarified that the banks will have the option to either execute fresh agreements or revise them through supplementary agreements."
Customers may have to get in touch with their bank branch and complete the formalities according to the revised agreement, adds Chand.
In case the executed agreements are not compliant with the revised IBA model agreement, banks would have to execute a fresh or supplementary agreement, says Meghna Mishra, Partner, Karanjawala & Co.
South Indian Bank, a private sector lender, has sent an email to its customers requesting them to submit fresh agreements again based on the model agreement even if they had submitted new agreements earlier. The bank said, "We understand that you have already executed the locker agreement renewal. However, as per RBI circular RBI/2022-23/168 dated 23.01.2023, a new revised format of locker agreement has been shared by IBA on 28.02.2023. As per the RBI circular, all those customers who have already executed the locker agreement in the earlier format also need to be informed for execution of locker agreement in the revised format."
Punjab National Bank (PNB) has also started giving out revised bank locker agreements to their customers to comply with the RBI circular.
Chand says that according to the revised guidelines, the IBA has issued two types of agreement formats for banks. The first one, "Model Supplementary Safe Deposit Locker Agreement", is for customers who have already executed the "Model Safe Deposit Locker Agreement" after the RBI circular arrived; the second, "Model Revised Safe Deposit Locker Agreement", is for customers who have so far not executed any agreement according to the RBI guideline.
Who will pay for the revised bank locker agreement?
The RBI has asked banks to bear the cost of the stamp paper for the revised agreements. Mishra adds, "The circular clarifies that the cost of stamp paper in such cases may be borne by the banks and also advises banks to facilitate execution of the fresh/supplementary stamped agreements with their customers by taking measures such as arranging stamp papers, franking, electronic execution of agreement, e-stamping, etc, and provide a copy of the executed agreement to the customer."
The onus is now on banks to extend full support to their customers, and further process will not get cumbersome electronic execution of agreements is enabled, adds Chand.
The revised model agreement must be executed by December 31, 2023. "Banks are advised to notify all their customers of the revised requirements by April 30, 2023 and ensure that at least 50 per cent and 75 per cent of their existing customers have executed the revised agreements by June 30 and September 30, 2023 respectively," said the RBI circular released in January.
