What changed
RBI has superseded all previous locker guidelines with a single circular. Key changes include: a ban on linking locker allotment to fixed deposits beyond a 3-year rent cover, mandatory waitlist maintenance with acknowledgment, and enhanced KYC for all locker holders. Banks must now immediately contact locker holders who have not operated their lockers for over 3 years (or 1 year for high-risk customers) and can cancel allotment after due notice if no response, provided the agreement includes a clause allowing this.
What it means for you
Banks must immediately stop any practice of requiring fixed deposits beyond the permitted 3-year rent cover for new locker allotments. They need to update their KYC processes to at least medium-risk level for all locker holders and implement a system to track locker inactivity. This will increase operational burden but reduce risks of misuse and improve customer service transparency.
What you must do
- Update locker allotment policy to prohibit linking to fixed deposits beyond 3-year rent cover and ensure no such demand from existing hirers.
- Implement a transparent waitlist system with acknowledgment for all locker applications.
- Conduct KYC for all existing locker holders at least to medium-risk level; for higher-risk customers, apply stricter norms.
- Set up a monitoring mechanism to identify lockers unoperated for over 3 years (or 1 year for high-risk) and immediately contact hirers.
- Amend locker agreements to include a clause allowing cancellation and opening of lockers if unoperated for over 1 year, even if rent is paid, and follow due notice procedures.
Who it affects
All scheduled commercial banks (excluding RRBs), Branch managers handling locker operations, Compliance and KYC teams, Internal audit departments, Locker hirers (existing and prospective)
Can banks still ask for a fixed deposit when allotting a locker?
Yes, but only to cover 3 years' rent and locker-breaking charges. Banks cannot insist on any additional deposit or link locker allotment to other deposits.
What should banks do if a locker remains unoperated for more than 3 years?
Banks must immediately contact the hirer, ask them to operate or surrender the locker, and obtain written reasons for non-operation. If no response, banks can open the locker after due notice, provided the agreement allows it.
Does this circular apply to existing locker hirers?
Yes, for KYC and unoperated locker monitoring. However, banks cannot demand a fixed deposit from existing hirers if they did not have one earlier.