Frame new financial institution locker guidelines inside 6 months: Supreme Court directs RBI

Image Source : FILE PHOTO The Supreme Court has requested RBI to border new financial institution locker guidelines inside 6 months.
The Supreme Court on Friday stated the current state of affairs on administration on financial institution lockers is insufficient and muddled, and there’s no uniformity in guidelines because it directed the RBI to put down rules, inside six months, for steps essential for banks on this challenge.

A bench comprising Justices Mohan M. Shantanagoudar and Vineet Saran stated that every financial institution is following its personal set of procedures and there’s no uniformity within the guidelines.

“Given that we are steadily moving towards a cashless economy, people are hesitant to keep their liquid assets at home as was the case earlier. Thus, as is evident from the rising demand for such services, lockers have become an essential service provided by every banking institution,” it stated.

The bench famous that it appears that evidently the banks are beneath the mistaken impression that not having data of the contents of the locker exempts them from legal responsibility for failing to safe these.

“Inasmuch as we are the highest court of the country, we cannot allow the litigation between the bank and locker holders to continue in this vein. This will lead to a state of anarchy wherein the banks will routinely commit lapses in proper management of the lockers, leaving it to the hapless customers to bear the costs,” it stated.

It is crucial that the courtroom lays down sure rules which is able to be sure that the banks observe due diligence in working their locker amenities, till the issuance of complete pointers on this regard, it stated.

The high courtroom famous that the Reserve Bank of India had issued clear instructions way back to in 2007 imposing responsibility of care in respect of safety of the financial institution lockers and mandating transparency vis-a-vis the locker holder in allotment and breaking open of the lockers.

“However, it has been left to the discretion of the individual banks to formulate the exact procedures for fulfilling this duty of care. The banks are likely to draft the locker hiring agreements in a manner which is favourable to their interests, including clauses to the effect that the lockers are to be operated at the consumers’ own risk,” it stated.

The courtroom famous that the system is transitioning from twin key operated lockers to electronically operated lockers. In the system, although the client could have partial entry to the locker by means of passwords or ATM pin, and so forth, they’re unlikely to own the technological knowhow to manage the operation of such lockers. “Thus, it is 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… In view of the same, we direct the RBI to issue suitable rules or regulations as aforesaid within six months from the date of this judgment,” it stated.

The verdict got here on an enchantment filed by Kolkata resident Amitabha Dasgupta difficult a National Consumer Disputes Redressal Commission (NCDRC) order. He filed a criticism earlier than the district client discussion board looking for a route to United Bank of India to return the seven ornaments that had been within the locker, or alternatively pay Rs 3 lakh in the direction of the price of jewelry, and compensation for damages.

The NCDRC had accepted the findings that client discussion board has restricted jurisdiction to resolve on the restoration of contents within the locker.
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