1.             Customer Due Diligence (CDD) for Lockers

1.1          The existing customers of a bank with a current/ saving account who have made an application for locker facility and who are fully compliant with the CDD criteria under the Know Your Customer (KYC) Policy of the bank (as updated from time to time) may be given the facilities of safe deposit lockers/ safe custody article subject to on-going compliance.

1.2          The recent passport size photographs of locker-hirer(s) and individual(s) authorized by locker hirer(s) to operate the locker shall be obtained by bank and the records pertaining to locker-hirer shall be preserved and maintained in the bank’s branch.

2.             Locker Allotment and Rent

2.1          The locker may be allotted to either sole hirer or joint hirer(s). For joint hirer(s) maximum three persons shall be allowed to hire the locker. However, the locker shall not be allotted to a minor.

2.2          At the time of allotment, duly filled application form shall be mandatorily obtained from the customer with the proper mandate clause to operate the locker in case of joint hirer(s) (eg. – single, joint, either or survivor, former or survivor, later or survivor or any- one or survivor).

2.3          In order to facilitate customers making informed choices, branch shall maintain a list of vacant lockers as well as a wait-list for the purpose of allotment of lockers and ensure transparency in allotment of lockers. The branch shall acknowledge the receipt of all applications for allotment of locker and provide a wait list number to the customers, if the lockers are not available for allotment.

2.4          At the time of allotment of the locker to a customer, the bank shall enter into an agreement as per the bank’s board-approved format with the customer to whom the locker facility is provided, on a duly stamped paper (on stamp duty as decided by competent authority from time to time). A copy of the locker agreement in duplicate signed by both the parties shall be furnished to the locker-hirer to know his/her rights and responsibilities. Original Agreement shall be retained with the bank’s branch where the locker is situated.

2.5         The agreement with the existing locker customers shall be renewed in the latest board approved format by January 1, 2023.

2.6          At the time of allotment, a Term Deposit may be obtained, which would cover three years’ rent and the charges for breaking open the locker in case of such eventuality.

2.7          If locker rent is collected in advance, in the event of surrender of a locker by a customer, the proportionate amount of advance rent collected shall be refunded to the customer.

2.8          In the event of merger / closure / shifting of branch warranting physical relocation of the lockers, the public notice in two newspapers (including one local daily in vernacular language) shall be given in this regard and the customers shall be intimated at least two months in advance along with options for them to change or close the facility. In case of unplanned shifting due to natural calamities or any other such emergency situation, efforts to intimate the customers suitably at the earliest shall be made.

3.             Infrastructure and Security Standards

3.1         To ensure proper security of the locker facility area to prevent criminal break-ins, required necessary steps shall be taken. Branch shall have a single defined point of entry and exit to the locker room/vault. The place where the lockers are housed should be secured enough to protect against hazard of rain / flood water entering and damaging the lockers in contingent situations. The fire hazard risks of the area should also be assessed and minimized. The bank shall conduct necessary engineering / safety verification regularly to identify the risks and carry out necessary rectification.

3.2          The area housing the lockers should remain adequately guarded at all times. The entry and exit of the strong room and the common areas of operation should be covered under CCTV camera and its recording shall be preserved for a period of not less than 180 days. In case any customer has complained to the bank that his/her locker is opened without his/her knowledge and authority, or any theft or security breach is noticed/observed, the bank shall preserve the CCTV recording till the police investigation is completed and the dispute is settled.

3.3         The security procedures shall be well-documented and proper training shall be given to the concerned staff in the procedure. The internal auditors shall verify and report the compliance to ensure that the procedures are strictly adhered to.

3.4         All the new mechanical lockers to be installed by the banks shall conform to basic standards / benchmarks for safety and security as prescribed by Bureau of Indian Standards (BIS) or any other enhanced industry standards applicable in this regard.

3.5         It shall be ensured that identification Code of the bank / branch is embossed on all the locker keys with a view to facilitating identification of lockers / locker ownership by law enforcement agencies in case of need. Further, the locker keys maintained in the branch shall be regularly/ periodically checked by the custodian of the locker to ensure that they are in proper condition. Bank shall permit the locker-hirer to operate the locker only with the key provided by the bank, although there is no restriction in allowing the customer to use an additional padlock of her /his own if there are such provisions in lockers.

4.             Locker Operations

4.1          The locker hirer and/or the persons duly authorized by him/ her only shall be permitted to operate the locker after proper verification of their identity and recording of the authorization by the officials concerned of the bank. A record of all individuals, including the locker-hirers shall be maintained, who have accessed the lockers and the date and time (both check-in and check-out time) on which they have opened and closed the locker with their signature. The ingress and egress register for access to Vault Room by locker-hirers or any other individual including the banks’ staff shall be maintained to record the movement of individuals in the Vault Room area with their signatures at appropriate place in the records.

4.2         The bank’s officer authorizing the locker-hirer to access the locker, after unlocking the first key shall not remain present when the locker is opened by the locker-hirer. The adequate privacy to the locker-hirers in the operations shall be ensured when customers access the lockers at the same time.

4.3          An email and SMS alert to the registered email ID and mobile number of the customer shall be sent before the end of the day as a positive confirmation intimating the date and time of the locker operation and the redressal mechanism available in case of unauthorized locker access.

4.4          The keys of vacant lockers shall be kept in sealed envelopes. The duplicate master keys shall be deposited with the head office of the bank. There shall be proper record of joint custody of master keys. The surprise periodic verification of surrendered/ vacant lockers and their keys shall be conducted by an officer of the bank who is not connected with their custody and proper record shall be maintained as a proof of such verification.

4.5          The Locker Register shall be updated in case of any change in the allotment with complete audit trails.

4.6          The bank custodian shall check whether the lockers are properly closed post locker operation. If the same is not done, the lockers must be immediately closed, and the locker-hirer shall be promptly intimated through e-mail, if registered or through SMS, if mobile number is registered or through letter so that they may verify any resulting discrepancy in the contents of the locker. The bank custodian shall record the fact of not closing the locker properly in the register and its closure by the bank with the date and time. Further, a physical check of the locker room shall be carried out at the end of the day to ensure that lockers are properly closed, and that no person is inadvertently trapped in the locker room after banking hours.

5.             Nomination Facility and Settlement of Claims

5.1         The nomination facility for safe deposit lockers shall be offered in accordance with the provisions of section 45-ZC to 45-ZF of the Banking Regulation Act, 1949 and Banking Companies (Nomination) Rules, 1985/Co-operative Banks (Nomination) Rules, 1985. In case the nominee is a minor, the same procedure as prescribed for the bank accounts shall be followed. A passport size photo of the nominee attested by the customer shall be obtained from the customers and preserved in the records.

5.2          In the case of sole hirer of a locker, the nomination can be made in favour of only one person. Similarly, in the case of locker hired jointly with one or more persons with mode of operation as “Any one of the hirers”, nomination is permissible only in favour of one person.

5.3          If a locker, hired by two or more persons, is to be operated under the joint signatures of two or more of them, such hirers may nominate one or more persons. The number of nominee in such cases should be restricted to the number of joint hirers.

5.4          For the existing customers who have not made nomination, nomination in suitable form shall be obtained.

5.5          For the various Forms SL1, SL1A, SL2, SL3 and SL3A for Safety Lockers) prescribed under Banking Companies (Nomination) Rules, 1985/Co-operative Banks (Nomination) Rules, 1985, only Thumb-impression(s) shall be required to be attested by two witnesses. Signatures of the account holders need not be attested by witnesses.

5.6          For nomination, cancellation and / or variation of the nomination, acknowledgement receipt shall be given to all the customers irrespective of whether the same is demanded by the customers or not.

5.7          In order to ensure that the contents of lockers are returned to the genuine nominee, as also to verify the proof of death, claim shall be submitted in the bank’s prescribed claim format.

5.8          Time limit for settlement of claims: The claims in respect of deceased locker hirers and releasing contents of the locker to survivor(s) / nominee(s), as the case may be, shall be settled within a period not exceeding 15 days from the date of receipt of the claim subject to the production of proof of death of the depositor and suitable identification of the claimant(s) with reference to nomination, to the bank's satisfaction.

5.9          The report shall be submitted to the Board of the bank, at appropriate intervals, on an ongoing basis, the details of the number of claims received pertaining to deceased locker-hirers / depositors of safe custody article accounts and those pending beyond the stipulated period, with reasons therefor. The settlement of claims shall be reviewed by the board to ensure that the claims are settled as early as possible unless there is any litigation pending before the Courts or any difficulty is being faced in identifying the true claimant with reference to nomination.

5.10        If the sole locker hirer nominates an individual to receive the contents in the locker, in case of his death, after verification of the death certificate and satisfying the identity and genuineness of such individual approached, the access of the locker to such nominee shall be given with liberty to remove the contents of the locker, after an inventory was taken in the prescribed manner.

5.11        In case the locker was hired jointly with the instructions to operate it under joint signatures, and the locker hirer(s) nominates any other individual(s), in the event of death of any of the locker hirers, the access of the locker and the liberty to remove the contents shall be given jointly to the survivor(s) and the nominee(s) after an inventory was taken in the prescribed manner.

5.12       In case the locker was hired jointly with survivorship clause and the hirers instructed that the access of the locker should be given to "either or survivor", "anyone or survivor" or "former or survivor" or according to any other survivorship clause permissible under the provisions of the Banking Regulation Act, 1949, then in the event of death of one or more of the joint locker-hirers, the access of the locker and the liberty to remove the contents shall be given to the survivor(s).

5.13        Before giving access to the contents to nominee / survivor following shall be ensured:

(i)            Exercise due care and caution in establishing the identity of the survivor(s) / nominee(s) and the fact of death of the locker hirer by obtaining appropriate documentary evidence;

(ii)           Make diligent effort to find out whether there is any order or direction from Courts/Forums restraining it from giving access to the locker of the deceased; and

(iii)          Make it clear to the survivor(s) / nominee(s) that access to articles in the locker / safe custody articles is given to them only as a trustee of the legal heirs of the deceased locker hirer i.e., such access given to them shall not affect the right or claim which any person may have against the survivor(s) / nominee(s) to whom the access is given.

5.14       The contents of locker, when sought to be removed on behalf of a minor nominee, shall be handed over to a person who is, in law, competent to receive the articles on behalf of such minor. An inventory of the articles shall be prepared in the presence of two independent witnesses, one officer of the bank who is not associated with the locker facility or safe deposit of articles and the claimant (s), who may be a nominee or an individual receiving the articles, on behalf of a minor.

5.15        A separate statement from the nominee (claimant) or the person competent to receive articles on behalf of the minor, as the case may be, shall be obtained that all the contents in the locker are received and the locker is empty and they have no objection to allotment of the locker to any other customer as per norms.

5.16        In case where the deceased locker hirer had not made any nomination or where the joint hirers had not given any mandate that the access may be given to one or more of the survivors by a clear survivorship clause, the access shall be given to legal heir(s) / legal representative of the deceased locker hirer after submission of succession certificate from competent authority.

6.             Closure and Discharge of locker items

6.1          If the key of the locker, supplied by bank is lost by the locker-hirer, the customer (locker hirer) shall notify the bank immediately. An undertaking shall be obtained from the customer that the key lost, if found in future, will be handed over to the bank. All charges for opening the locker, changing the lock and replacing the lost key shall be recovered from the hirer. The charges applicable for replacement of lost keys shall be communicated to the locker hirer.

6.2          The opening of the locker has to be carried out by the bank or its authorized technician only after proper identification of the hirer, proper recording of the fact of loss and written authorization by the customer for breaking open the locker.

6.3          The operation shall be done in the presence of the customer/s and an authorized official of the bank. It has to be ensured that the adjoining lockers are not impacted by any such operations and the contents of the lockers are not exposed to any individual other than the locker-hirer during the break-up or restoration process.

6.4          In case of attachment and recovery of the contents in a locker of a customer by any Authority acting either under the orders of a Court or any other competent authority vested with the power to pass such orders, the banks shall co-operate in execution and implementation of the orders.

6.5          The orders and the connected documents received for attachment and recovery of the contents in a locker of the bank shall be verified. The customer (locker-hirer) shall be informed by letter as well as by email/SMS to the registered email id/mobile phone number that the Government Authorities have approached for attachment and recovery or seizure of the locker. An inventory of the contents of locker seized and recovered by the Authority shall be prepared in the presence of such Government Authorities, two independent witnesses and an officer of the bank and shall be signed by all. A copy of the inventory may be forwarded to the customer to the address available in the bank’s records or handed over to the customer against acknowledgement.

6.6         The break-open process and the inventory assessment, wherever legally permissible shall be recorded in a video and preserved to produce as evidence in case of any dispute or Court or fraud case in future.

6.7          If the rent has not been paid by the customer for three years in a row then Bank shall have the discretion to break open any locker after the existing locker-hirer has been notified about the same and prior to any changes in the allotment reasonable opportunity shall be given to withdraw the articles deposited by him/her.

6.8          Before breaking open the locker, the due notice shall be given to the locker-hirer through a letter and through email and SMS alert to the registered email id and mobile phone number. If the letter is returned undelivered or the locker-hirer is not traceable, public notice shall be issued in two newspaper dailies (one in English and another in local language) giving reasonable time to the locker-hirer or to any other person/s who has interest in the contents of locker to respond. The locker shall be broken open in the presence of an officer of the bank and two independent witnesses. Further, the break open process shall be recorded in a video together with inventory assessment and its safe keep and shall be preserved the same so as to provide evidence in case of any dispute or Court case in future. It shall also be ensured that the details of breaking open of locker is documented in CBS or any other computerized systems compliant with the Cyber Security Framework issued by RBI, apart from locker register. After breaking open of locker, the contents shall be kept in sealed envelope with detailed inventory inside fireproof safe in a tamper-proof way until customer claims it. A record of access to the fireproof safe shall invariably be maintained. While returning the contents of the locker, acknowledgement shall be obtained from the customer on the inventory list to avoid any dispute in future.

6.9          The inventory prepared after breaking open of the locker and during settlement of claims, shall be kept in the appropriate forms as provided. The sealed/closed packets found in locker shall not be opened while releasing them to the nominee(s) and surviving locker hirers / depositor of safe custody article, unless required by law.

6.10        If the locker remains inoperative for a period of seven years and the locker-hirer cannot be located, even if rent is being paid regularly, the contents of the locker shall be transferred to their nominees/legal heir or disposed of the articles in a transparent manner, as the case may be. Before breaking open the locker, the proper procedure shall be followed as prescribed in paragraph 6.8 and 6.9 above. The procedure to be followed for disposal of the articles left unclaimed for a reasonably long period of time as mentioned above shall be incorporated in their locker agreement.

6.11       If the locker is not in operation and the locker is opened by the bank and contents are released as per law and as per the instructions issued by the Reserve Bank and the terms and conditions prescribed in the agreement, the bank shall not be liable.

7.             Compensation Policy / Liability for Banks

7.1          It shall be duty of the bank to ensure proper functioning of the locker system, guarding against unauthorized access to the lockers and providing appropriate safeguards against theft and robbery.

7.2         The bank shall not be liable for any damage and/or loss of contents of locker arising from natural calamities or Acts of God like earthquake, floods, lightning and thunderstorm or any act that is attributable to the sole fault or negligence of the customer. However, appropriate care to their locker systems shall be exercised to protect their premises from such catastrophes.

7.3         All steps for the safety and security of the premises in which the safe deposit vaults are housed, shall be taken. It has the responsibility to ensure that incidents like fire, theft/ burglary/ robbery, dacoity, building collapse do not occur in the bank’s premises due to its own shortcomings, negligence and by any act of omission/commission. For instances where loss of contents of locker are due to incidents mentioned above or attributable to fraud committed by its employee(s), the banks’ liability shall be for an amount equivalent to one hundred times the prevailing annual rent of the safe deposit locker.

8.             Risk Management, Transparency and Customer Guidance

8.1          To minimize the loss due to incidents like robbery, fire, natural calamities, loss during shifting/merger of branch, etc., affecting contents of lockers, a branch insurance policy shall be taken.

8.2         As bank do not keep a record of the contents of the locker or of any articles removed therefrom or placed therein by the customer, bank would not be under any liability to insure the contents of the locker against any risk whatsoever. Under no circumstances, any insurance product to its locker hirers for insurance of locker contents shall not be offered, directly or indirectly.

8.3         The updated information on all kinds of charges for safe deposit lockers and safe custody articles shall be displayed in the branch.

8.4          The instructions together with the policies / procedures put in place for giving access of the locker to the nominee(s) / survivor(s) / legal heir(s) of the deceased locker hirer shall be placed in the branch. Further, a printed copy of the same shall also be given to the nominee(s) / survivor(s) / legal heir(s).

8.5          The policy and standard operating procedures shall be revised as per the direction given by RBI and if found inconsistent with the RBI guidelines, RBI’s direction will prevail.