New locker rules unlock a can of troubles for customers

The new locker rules of banks have unlocked a lot of troubles with non-uniform practices being noticed not only between different banks but also between different branches of the same bank, The Times of India has reported.

The Reserve Bank has directed banks to strike new agreements regarding lockers with all customers by January 2023 after the Supreme Court issued an order in 2021 to that effect. A model agreement was drafted by the Indian Banks Association but RBI later modified it, whereby the deadline was extended to the last day of the current calendar year.

Banks’ liability
The new format of the agreement stipulated that banks would limit their liability to 100 times the annual locker rent though they are supposed to prevent situations such as collapse of buildings, fire and theft.

Though only six months remain before the expiry of the deadline for the banks to enter into new agreements with their customers, chaos pervades the entire scenario. Incidentally, it has been set in the directive that 50% of the agreements should be concluded by the end of June.

However, the branches of many banks are unprepared and underprepared and do not have the documents necessary for concluding new agreements. However, customers who have been asked to visit the branches and complete the formalities are troubled over the lack of uniformity in stamp duty denominations between branches that are located in the same state.

Stamp duty
It has been alleged that while some public sector branches are accepting stamp duty of Rs 100, some branches of private banks such as Axis Bank, HDFC Bank and ICICI Bank are asking for stamp paper of Rs 500. Some customers who signed agreements before the modification, were asked to visit the branches again to conclude supplementary agreements.

To add to the confusion, there is no uniformity with regard to who would bear the expenditure towards stamp duty. Though most banks expect that the customer would spend for the agreement, the largest bank in the country State Bank of India have said that they would bear the cost of the supplementary agreement.

The report has quoted Kedar Chandak, a customer from Mumbai, who said, “Indian Bank is requesting customers to bring Rs 500 stamp paper, while State Bank has provided only Rs 100 stamp paper for existing clients. In addition to the excess value of the stamp paper, Indian Bank is also charging its clients an additional Rs 500 to Rs 1,000 as registration fees.”

Responding to the allegation, Indian Bank said branches have been told to collect only the required stamp duty amount in accordance with laws of the respective state when customers submit their modified locker agreement. If a modified agreement was struck before February 28 this year, customers were mandatorily supposed to go for a fresh modified one following the revision by the RBI. However, in this case, the stamp duty would be borne by Indian Bank.

Those who are going to hire new lockers were supposed to pay one-time registration fees.
There are allegations of different practices applicable to those living abroad. Another resident of Mumbai, Ravi Agarwal has joint lockers with his son and daughter who are residents of the United States and the United Kingdom. While PSU Bank of Baroda would accept their signatures unattested, a private bank was asking for their signature to be attested at their respective Indian embassies, thus increasing the compliance burden.