Following the Supreme Court’s directions in February 2021, the RBI recently issued revised instructions to banks regarding the Safe Deposit Lockers. The new set of instructions are comprehensive and supersede the 2007 instructions. Here is a review. Following the Supreme Court’s order in February 2021, the Reserve Bank of India (RBI) issued revised instructions on 18 August 2021, regarding safe deposit locker and safe custody article facility provided by banks. These instructions shall come into force with effect from 2022. The new guidelines have been issued taking into consideration the various developments in banking and technology, the nature of consumer grievances and the feedback received from banks and the Indian Banks’ Association (IBA). The rules will be applicable to both new and existing safe deposit lockers and the safe custody of articles facility with the banks. In February 2021, the SC directed RBI to issue regulations concerning locker facility management In Amitabha Dasgupta Vs. United Bank of India, the Supreme Court bench, on 19 February 2021, directed the RBI (RBI) to lay down regulations within six months mandating the steps to be taken by banks with respect to locker facility and safe deposit facility management. The bench expressed how the rapid advent of technology resulted in the transition from dual key-operated lockers to electronically operated lockers. It noted the possibility that miscreants may manipulate the technologies used in these systems to gain access to the lockers without the customers’ knowledge or consent and the customer is completely at the mercy of bank. In view of this, the SC bench asked RBI to issue regulations and rules with respect to the responsibility owed by banks for any loss or damage to the contents of the locker. The revised instructions have been issued superseding the circular on the same issue issued by the RBI in 2007. The latest set of instructions are more comprehensive and detailed, unlike the erstwhile norms which were more generic. Further, the new norms also lay down guidelines pertaining to the use of technology. We explore some of the major issues addressed by the new set of instructions in this story. Allotment of lockers Existing customers of a bank and those customers who do not have a banking relationship with the bank who are in full compliance with the criteria under Know Your Customer (KYC) Directions may be given the safe deposit locker facility. Banks should carry out due diligence for all the customers who have applied for a locker. The due diligence shall be carried out for all the customers irrespective of their risk category, in contrast to the 2007 norms. A branch-wise list of vacant lockers as well as a waitlist in Core Banking System (CBS) or any other computerized system compliant with Cyber Security Framework issued by RBI should be maintained by banks for allotment of lockers and transparency must be ensured in the process. All applications received for allotment of locker should be acknowledged and given a waitlist number, as mentioned in the erstwhile 2007 guidelines. Locker Agreement Banks must adopt a model locker agreement to be framed by IBA (Indian Banks Association) and ensure that any unfair terms or conditions are not incorporated in their locker agreements. The locker agreements with existing locker customers should be renewed by 2023. Banks have been asked to incorporate a clause in the locker agreement that the locker-hirer/s shall not keep anything illegal or any hazardous substance in the Safe Deposit locker. In case a bank has suspicions about the deposit of illegal or hazardous substances in the locker by a customer, banks can take appropriate action against the customer. A duplicate copy of the agreement entered on a duly stamped paper signed by both the parties must be provided to the customer to inform them of their rights and responsibilities while the original agreement is retained with the bank. Locker Rent To ensure prompt payment of locker rent, banks are permitted to take a ‘Term Deposit’, at the time of allotment of the locker. The ‘Term Deposit’ would cover three years’ rent and the charges for breaking open the locker in case of such eventuality. Banks cannot insist on ‘Term Deposits’ from the existing locker holders or those who have a satisfactory operative account. A proportionate amount of rent collected in advance must be refunded to the customer when they surrender the locker key. In the 2007 norms, the deposit was referred to as Fixed Deposit. Apart from this, no change in the regulation has been made.