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SC directs RBI to lay down regulations for locker facility management

Its necessary that the RBI lays down comprehensive directions mandating the steps to be taken by banks with respect to locker facility.

Banking

SC directs RBI to lay down regulations for locker facility management

The Supreme Court, on Friday, ordered the Reserve Bank of India (RBI) to lay down regulations within six months mandating the steps to be taken by banks with respect to locker facility management.

The bench noted that with the advent of globalization, banking institutions have acquired a very significant role in the life of the common man as both domestic and international economic transactions within the country have increased multiple folds.




The Supreme Court said people are hesitant to keep their liquid assets at home as the country is steadily moving towards a cashless economy. “Thus, as is evident from the rising demand for such services, lockers have become an essential service provided by every banking institution. Such services may be availed of by citizens as well as by foreign nationals,” the bench said. “Moreover, due to rapid gains in technology, we are now transitioning from dual key operated lockers to electronically operated lockers.”

It highlighted that in the electronically operated lockers, though the customers may have partial access to the locker through passwords or ATM pin etc., they are unlikely to possess the technological knowhow to control the operation of such lockers. “On the other hand, there is the possibility that miscreants may manipulate the technologies used in these systems to gain access to the lockers without the customers’ knowledge or consent.”


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The top court said a customer is completely at the mercy of the bank, which is the more resourceful party for the protection of their assets. In such a situation, the banks cannot wash off their hands and claim that they bear no liability towards their customers for the operation of the locker. The bench said that very purpose for which the customer avails of the locker hiring facility is so that they may rest assured that their assets are being properly taken care of. “Such actions of the banks would not only violate the relevant provisions of the Consumer Protection Act, but also damage investor confidence and harm our reputation as an emerging economy.”

It said its necessary that the RBI lays down comprehensive directions mandating the steps to be taken by banks with respect to locker facility, safe deposit facility management.


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