The Supreme Court has said that banks are service providers under the consumer protection law. They must exercise due diligence in maintaining and operating their locker or safety deposit systems. This includes ensuring the proper functioning of the locker system, guarding against unauthorized access to the lockers, and providing appropriate safeguards against theft and robbery.
Irrespective of the value of the articles placed inside the locker, the bank has a duty to ensure that proper procedures are followed while allotting and operating lockers. The Court instructed the Reserve Bank of India to make new regulations for locker facility management. It also laid down guidelines that will apply until the new regulations are in place.
The Court said that banks must:
- Maintain a locker register and locker key register, and update them if there is any change in allotment. Banks must notify the original locker holder before changing the locker allotment, and allow them to withdraw their deposits if they wish to.
- Maintain a record of access to the lockers, containing details of all the people who accessed the lockers, and the date and time on which they were opened and closed. Bank employees must check whether the lockers are properly closed on a regular basis, and that the locker keys are in proper condition.
- Undertake proper verification procedures to ensure that no unauthorized person gets access to the locker. The space in which the locker facility is located should be adequately guarded at all times.
- If lockers are being operated through an electronic system, take reasonable steps to ensure that the system is protected against hacking or any breach of security.
- Comply with relevant laws and RBI regulations while breaking open any locker. Give a reasonable notice to the locker holder before breaking open a locker, and only break it open in the presence of authorized officials and an independent witness. Failure to follow these rules is an illegal act considered as gross deficiency of service by the bank as a service provider.
Give the customer a copy of the locker hiring agreement at the time of locker allotment to inform them of their rights and responsibilities.