What changed
RBI advises banks to refrain from requiring fixed deposits beyond what is permitted for locker allotment. Banks may obtain a fixed deposit covering 3 years' rent and break-open charges as security for new allotments, but cannot insist from existing hirers. For unoperated lockers, banks must contact hirers after 3 years (medium risk) or 1 year (high risk), and may open the locker after due notice if no response.
What it means for you
Urban co-operative banks must stop using locker allotment as a tool to push deposits, aligning with fair practice norms. The new FD security option helps recover dues but must not be forced on existing customers. Stricter KYC and monitoring of unoperated lockers reduce security risks, but require operational changes in branch processes.
What you must do
- Refrain from linking locker allotment to any fixed deposit beyond what RBI permits.
- Update locker agreements to include a clause allowing cancellation if unoperated for over 1 year.
- Carry out customer due diligence for all locker holders at least to medium risk levels; higher for riskier customers.
- Maintain a transparent wait list for locker allotment and provide a copy of the agreement to each hirer.
- Review and document security procedures for safe deposit vaults, and train staff accordingly.
Who it affects
Primary (Urban) Co-operative Banks, Locker hirers (new and existing), Branch operations and security teams, Internal audit departments
Can we still ask for a fixed deposit from new locker applicants?
Yes, but only to cover 3 years' rent and break-open charges as security. You cannot insist on any other deposit or link allotment to deposits beyond this.
What should we do if a locker remains unoperated for over a year?
For high-risk customers, contact them immediately. For medium-risk, after 3 years. Ask them to operate or surrender the locker in writing. If no response, you may cancel and open the locker after due notice.
Do these rules apply to existing locker holders?
Yes, for customer due diligence and unoperated locker monitoring. However, you cannot insist on a new fixed deposit from existing hirers.