Bank lockers – RBI’s proposed instructions – arms in lockers?
The RBI proposes to issue revised guidelines to the banks regarding bank lockers and a draft circular has been issued yesterday.. The salient features:-
Allotment of Lockers - linking the lockers facility with placement of fixed or any other deposit beyond what is prescribed is a restrictive practice and should be prohibited forthwith.
Relationship of the bank with the locker hirer - the relationship between the bank and the locker hirer is in the nature of a 'bailor and bailee' and not 'landlord and tenant' though the bank has no knowledge of the contents of the locker and the bank is required to exercise due care and necessary precaution for the protection of the lockers provided to the customer.
Operations of Safe Deposit Vaults/Lockers - Banks are advised to review the systems in force for operation of safe deposit vaults / locker at their branches on an on-going basis and take necessary steps to strengthen them by identifying the loopholes in the procedures and take remedial action.
Adherence to KYC Guidelines (High, Medium & Low Risk Category) for allotment of lockers / Measures relating to lockers which have remained unoperated - In a recent incident, explosives and weapons were found in a locker in one of the bank's branches. This emphasises that banks should be aware of the risks involved in renting safe deposit lockers. In this connection, banks are advised to take following measures :
(i) The KYC assessment for the safe-deposit locker customers (either new or existing), should be done at least to the levels prescribed for medium risk or the risk categories attributable to their bank account, if higher.
(ii) Where the lockers have remained unoperated for more than one and three years for high and medium risk categories respectively, banks should immediately contact the locker-hirers and advise them to operate the lockers or surrender the lockers even if the rents are being paid regularly. In case the locker-hirers still do not operate the locker, banks should consider opening the lockers with the help of police after giving due notice to the locker-hirers.
(iii) Banks should have an explicit policy for taking appropriate action including breaking open the lockers in cases where the rents are not paid by the locker-hirers
Access to locker (with survivor / nominee clause)
(i) In case of death of a sole locker-hirer (where there is nomination) access to locker may be given to the nominee. In such cases, except death certificate and identification of nominee, no other document should be obtained.
(ii) In case of death of one of the hirers, where there are joint locker-hirers and as per the contract of locker hire, the locker is to be operated jointly, and where there is nomination, access to the locker may be given to the nominee jointly with the surviving hirer(s). In such cases, except death certificate and identification of nominee, no other document need be obtained.
(iii) Where both / all the joint locker hirer(s) die and where there is nomination, access to the locker may be given to the nominee(s). In such cases, except death certificate and identification of nominee(s), no other document need be obtained.
(iv) Where there are joint locker-hirers having a contract of hire with survivorship clause such as 'either or survivor', 'anyone or survivor' etc., but the locker is not to be operated jointly, access to the locker may be given only to the survivor in case of death of one of the hirers.
Access to locker (without the survivor / nominee clause)
(i) In case of death of a sole locker-hirer (where there is no nomination) and there is a valid will, access may be given to the executor / administrator. In other cases, access may be given to the legal representative of the deceased. In such cases, death certificate and proof of legal representation should be obtained.
(ii) Where there are joint locker-hirers and as per the contract of locker hire, the locker is to be operated jointly, and where there is no nomination, if one of the hirers die, access to the locker may be given to the survivor jointly with the legal heirs (or the executor / administrator, if appointed) of the deceased hirer. In such cases, death certificate and proof of legal representation should be obtained.
(iii) Where there are joint locker-hirers having a contract of locker hire with a 'either or survivor' clause and where there is no nomination, access to the locker may be given to the survivor in case of death of one of the hirers. In such cases, only death certificate should be obtained.
(iv) Where there are joint locker hirers, and all the hirers die and where there is no nomination, access to the locker may be given jointly to the legal heirs of all the deceased hirers (or the executor / administrator if appointed). In such cases, only death certificate and proof of legal representation should be obtained.
Return of safe custody article in case of sole depositor
(i) In case of death of a sole depositor of safe custody article (where there is nomination), such article may be returned to the nominee. In such cases, except death certificate and identification of nominee, no other document should be obtained.
(ii) In case of death of an individual depositor of safe custody article (where there is no nomination), such article may be returned to the legal representative of the deceased (or the executor / administrator if appointed). In such cases, death certificate and proof of legal representation should be obtained.
Return of safe custody article in case of joint depositors - The facility of nomination is not available in case of deposit of article for safe custody with a bank by more than one person. In case of joint deposit of safe deposit articles,
(a) when one or more of the joint depositors of safe custody articles die, such article may be returned to the survivor(s) provided there is a survivorship mandate. In such cases, except death certificate, no other document need be obtained.
(b) In case there is no survivorship mandate, such article may be returned to the survivor(s) jointly with the legal heirs of the deceased depositor(s) (or the executor / administrator if appointed). In such cases, death certificate and proof of legal representation should be obtained.
(c) When both or all the joint depositors of safe custody article die, such article may be returned jointly to the legal heirs of all the deceased depositors (or the executor / administrator if appointed). In such cases, death certificate and proof of legal representation should be obtained.
Disclosure :
++ At the time of providing safe deposit lockers/safe custody facility to new customers, it shall be incumbent upon the banks to provide printed information as contained in the circular to the customer along with the account opening application form.
++ For existing safe deposit locker holders, banks should mail the printed instructions. The existing safe deposit locker accounts which do not have a nomination or survivorship clause should be reviewed and the exercise of obtaining the option, if any, of the account holder should be completed within one year.
++ Banks may also popularise the availability and utility of nomination/survivorship clause facility to facilitate hassle free settlement of claims in respect of deceased safe deposit locker holders.
DBOD.No.Leg 5049 /09.07.005/2006-07 dated December 4, 2006