What changed
RBI superseded all prior locker guidelines with a consolidated circular. Key changes: (1) Banks cannot insist on fixed deposits beyond 3-year rent cover for new lockers; (2) Mandatory wait-list with acknowledgment numbers for all locker applications; (3) KYC due diligence at least at medium-risk level for all locker holders; (4) Unoperated lockers must be reviewed after 3 years (medium risk) or 1 year (high risk), with written explanation sought from hirer.
What it means for you
Co-operative banks must stop linking locker allotment to extra deposits, reducing customer friction. The new KYC and unoperated locker rules aim to prevent misuse (e.g., storing explosives) and ensure compliance. Banks need to update locker agreements, train staff on security procedures, and proactively contact dormant locker holders. This may increase operational burden but reduces regulatory risk.
What you must do
- Stop linking locker allotment to fixed deposits beyond 3-year rent cover; do not apply to existing hirers.
- Maintain a transparent wait-list for lockers and issue acknowledgment with wait-list numbers.
- Conduct KYC due diligence for all locker holders at least at medium-risk level; higher if risk category warrants.
- Review unoperated lockers: contact hirers after 3 years (medium risk) or 1 year (high risk), seek written reasons, and consider cancellation if no response.
- Update locker agreements to include clause on right to cancel if locker remains unoperated for over 1 year.
Who it affects
State and Central Co-operative Banks, Locker hirers (new and existing), Branch operations and security staff, Internal audit teams
Can we still ask for a fixed deposit from locker hirers?
Yes, but only to cover 3 years' rent and locker-breaking charges for new allotments. You cannot insist on any additional deposit beyond this, and existing hirers cannot be forced to provide such a deposit.
What should we do if a locker remains unoperated for over 3 years?
Contact the hirer immediately, ask them to operate or surrender the locker, and get a written reason for non-operation. If no response, after due notice, you may open the locker. For high-risk customers, this review period is 1 year.
Do we need to update our locker agreement?
Yes. Include a clause that the bank has the right to cancel allotment if the locker remains unoperated for more than one year. Also, provide a copy of the agreement to the hirer at allotment.