RBI extends deadline for renewal of safe deposit locker agreements till December 2023

In a major relief to customers, the Reserve Bank of India (RBI) on Monday 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 December 31, 2023, from an earlier deadline of January 1, 2023.

Facilitation for Customers

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

Model Agreement Review

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

Phased Implementation

• 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 December 31, 2023. The central bank has asked banks to inform all their existing locker customers about the renewal requirement by April 30, 2023. Banks will have to ensure that at least 50 per cent of their existing locker customers have renewed agreements by June 30 and 75 per cent by September 30, 2023.

Reason for Extension

• The deadline has been extended as 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 January 1, 2023. The RBI also found that the model agreement drafted by the IBA needs a revision to fully comply with the revised instructions issued in August 2021.

Frozen Locker Operations

• In the absence of the execution of revised locker agreements by January 1, 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.

Synopsis

The extension of the deadline for renewal of safe deposit locker agreements by the RBI will provide customers with more time to renew their agreements and avoid any inconvenience caused by frozen locker operations. The review of the model agreement by the IBA and the measures taken by banks to facilitate the execution of agreements will also make the process smoother for customers.