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MUMNAI : The Reserve Bank of India (RBI) on Monday extended the deadline for banks to finish the process of renewing agreements with safe deposit locker customers in a phased manner to address the concerns of customers.

The deadline was pushed by a year to 31 December from 1 January 2023. “…it has come to the notice of Reserve Bank that large number of customers are yet to execute revised agreements and are facing difficulty in doing the same. In many cases, banks are yet to inform the customers about the need to renew the agreements before 1 January," it said in a statement posted on its website.

The central bank directed lenders to unfreeze the lockers that were frozen for non-execution of agreement by 1 January. Further, RBI sought revision in the model agreement drafted by the Indian Banks’ Association to comply with its revised guidelines.

In August 2021, RBI revised the regulations on maintaining bank lockers, making them applicable to new customers from January 2022 and existing customers from January 2023. The central bank asked banks to put in place a board-approved agreement format for safe deposit locker customers, and allowed them to adopt an agreement framed by the Indian Banks’ Association.

It directed banks to notify all customers of the requirements by 30 April and ensure 50% and 75% of existing customers execute the revised agreement by 30 June and 30 September, respectively. Banks will need to report compliance status on its Daksh supervisory portal, RBI said. “Banks are advised to facilitate execution of fresh or supplementary stamped agreements with customers by taking measures such as arranging stamp papers, franking, electronic execution of agreement, e-stamping, and provide a copy of the executed agreement to the customer."

RBI also said the association should review and revise the model agreement and ensure it complies with RBI’s August 2021 requirements and circulate the revised format to all banks by 28 February.

“There may be instances, where the revised agreements already executed in pursuance of circular dated 18 August 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," it said.

In such cases, RBI said, banks will have the option to execute fresh agreements or revise them through supplementary agreements and the cost of stamp paper in such cases may be borne by the banks.

Mint reported on 8 January that a last-minute rush to renew bank locker agreements under a new rule is leading to queues, confusion and a scramble for stamp paper at several bank branches.

ABOUT THE AUTHOR

Shayan Ghosh

Shayan Ghosh is a national writer at Mint reporting on traditional banks and shadow banks. He has over a decade of experience in financial journalism. Based in Mint’s Mumbai bureau since 2018, he tracks interest rate movements and its impact on companies and the broader economy. His interests also include the distressed debt market, especially as India’s bankruptcy law attempts recoveries of billions worth of toxic assets.
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