Do you keep your valuables in a Bank Locker? Or are you a joint holder of a Bank Locker with your relatives? If so, during the past few days, you may have received a message(s) from your bank reminding you to ‘Renew Your Locker Agreement on or before December 31, 2022’. Have you acted on this? Should you act on it? What are these messages all about? Why is the bank sending these messages? Some of your other friends having lockers with other banks have not received these messages, so is this being initiated only by some banks? Do you need to enter into a fresh Locker Agreement, especially if you just have earlier this year? How does one go about the entire exercise? Read on to avoid making multiple visits to your bank and getting frustrated in the bargain, apart from losing precious time and money…

 

The Reserve Bank of India issued a circular on August 18, 2021 (bearing reference number RBI/2021-2022/86 DOR.LEG.REC/40/09.07.005/2021-22) providing revised instructions on Safe Deposit Lockers / Safe custody article facilities provided by the Banks (Scheduled Commercial Banks, Co-operative Banks, Small Finance Banks, All Payments Banks and All Local Area Banks) (hereinafter referred to as ‘the said Circular’).  Vide the said Circular, the revised guidelines were effective from January 1, 2022 and applicable to both new and existing safe deposit lockers and the safe custody of articles facility with the Banks.

 

THUS, AS ALL BANKS HAVE BEEN MANDATED TO HAVE NEW LOCKER AGREEMENTS EXECUTED WITH THE EXISTING LOCKER CUSTOMERS BY JANUARY 1, 2023, YOU ARE ADVISED TO EXECUTE THE NEW LOCKER AGREEMENT WITHOUT ANY FURTHER DELAY, IF YOU HAVE NOT DONE SO ALREADY.

 

The Banks will require you to execute the new Locker Agreement even if you have executed a Locker Agreement earlier in the year; if you had executed the previous version of the Agreement. This is because the Reserve Bank of India has mandated revisions in the Locker Agreement to include certain clauses such as: ‘Banks shall incorporate a clause in the locker agreement that the locker-hirer/s shall not keep anything illegal or any hazardous substance in the Safe Deposit locker. If the bank suspects the deposit of any illegal or hazardous substance by any customer in the safe deposit locker, the bank shall have the right to take appropriate action against such customer as it deems fit and proper in the circumstances.’

So, how do you go about it?

As the first step, visit your bank where the locker is located and procure a copy of the printed Locker Agreement.  Do read the Agreement terms and conditions to apprise yourself on the Do’s and Don’ts as regards the usage, rent payment terms, etc. of your locker. Next, get your Agreement franked with the requisite stamp duty or, in the alternative, purchase stamp paper of the requisite value. The Locker Agreement needs to be stamped with the requisite stamp duty as mandated by the Stamp Act of the respective State of India, in which the Bank is providing the Locker facility. Stamp Paper of Rs 500/- or the Locker Agreement should be franked with stamp duty of Rs. 500/- if the Bank is executing the Agreement / Locker is provided in the State of Maharashtra. Collate the requisite documents that are required to be submitted with the stamped Locker Agreement as enlisted below.

Documents to submit along with the Revised / New Locker Agreement:

1. The franked / stamped Locker Agreement or Stamp Paper of the requisite value.
2. Receipt for the proper stamp duty paid on the above document (sr. no 1) if the document is franked.
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3. Recent passport size photographs (2 per locker-hirer(s) and individual(s) authorised by locker hirer(s) to operate the locker).
4. PAN card / Aadhaar Card copy (per locker-hirer executing the Locker Agreement).
5. Proof of Address document (per locker-hirer executing the Locker Agreement).

Self-certify the KYC related documents and mention (out of abundant caution) that the documents are being submitted to the bank for the sole purpose of the new Locker Agreement.

Execute the Agreement in the bank in the presence of the officials, if they instruct you to do so. In any event, do NOT execute the Agreement before the same is franked or the Stamp Paper is purchased.

If an existing Locker Agreement customer intends to add or delete any joint account holders from the previous Agreement, then the relevant forms need to be procured from the Bank for the same and the parties need to submit executed copies of the form(s) to the bank. If the deletion of the name is on account of death of a joint holder, then the death certificate (original or notarised) of the deceased account holder needs to be submitted with the Form.

You are advised to complete executing the new Locker Agreement, as doing it later will call for enduring long queues, for the franking / stamping / purchase of stamp paper and submission of the documents with your Bank. I look forward to answering your legal queries via my articles in Parsi Times.