RBI’s guidelines on lockers need a rethink

S Kalyanasundaram | | Updated on: Nov 18, 2021
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The RBI has issued revised guidelines which comes to effect from January 1, 2022

While deciding the case ‘Amitabha Dasgupta vs United Bank of India’ on February 19, 2021, the Supreme Court has directed the Reserve Bank of India to issue suitable rules and regulations on the responsibility of banks on various aspects of safe deposit lockers within six months.

Now on August 18, 2021 (exactly within six months), the RBI came out with modified guidelines on the safe deposit lockers provided by banks. The RBI claims that taking into consideration the various developments in the area of banking and technology, nature of consumer grievances and also the feedback received from banks and Indian Banks’ Association (IBA), it has reviewed the guidelines/instructions issued on the above subject. It has also cited the case dealt by the Supreme Court in this regard. The RBI has issued revised guidelines which comes to effect from January 1, 2022.

One of the directions relates to the access to the articles in the safe deposit lockers to the nominees of the deceased locker hirer. Para 5.3.1 says, “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 banks shall give access of the locker to such nominee with liberty to remove the contents of the locker, after an inventory was taken in the prescribed manner.

“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 bank shall give access of the locker and the liberty to remove the contents jointly to the survivor(s) and the nominee(s) after an inventory was taken in the prescribed manner.”

Further the RBI has mandated that the banks must 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.

The above guidelines seem to have been issued without much forethought. It is true that the nominee does not become the owner of the property passed on to him. His right is to only receive and not to appropriate. But bank’s job will be complete once the property is handed over to the nominee. Even in the case of deposits of deceased customers, banks just simply pay the amount of deposit to the nominee and with that the bank’s job is over.

In the same way, the access of locker should be provided to the nominee after due verification and there is no need to make an inventory of the contents of the locker in such cases. The locker may contain numerous tiny jewellery which will be difficult to be described in any inventory list. Simple description of the item may not be sufficient. Value of the article will be important in such listing and valuation of items will be cumbersome for a banker.

The gold jewellery may be with different purity and quality. Diamonds may need clear description as a diamond's value is determined by its famous 4Cs: carat weight, colour, cut, clarity. There may even be collectors’ item or antiques in the lockers. Describing all these items properly will be beyond the capability of bankers and moreover there is no law which makes it mandatory for bankers to do such list of inventory. By making inventory of the contents of the locker, the bank will be made a party in any dispute in future between the true owners and the nominee.

The banks and Indian Banks Association must take up with the RBI for modification of the guidelines, as the banks cannot be expected to take onerous responsibility which is unwarranted.

The writer is a retired banker

Published on November 19, 2021

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