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Supreme Court sets 6-month deadline for RBI to frame new bank locker rules

Supreme Court directs RBI on new bank locker rules

The Supreme Court on Friday directed the Reserve Bank of India (RBI) to frame comprehensive rules on bank lockers within six months to prevent banks from imposing unilateral and unfair terms on the consumers.

Pending the RBI rules, the Bench of Justices Mohan M Shantanagoudar and Vineet Saran said the principle laid down by it on responsibilities of the bank will be binding on all banks providing such facilities.

It also directed the RBI to draft suitable rules on the responsibility of the bank for loss or damage to the contents of the lockers.

Banks are the custodians of public property and they "cannot leave their customers in the lurch" by claiming ignorance of the contents of their lockers, the Supreme Court said on Friday as it observed that the “present state of regulations on locker management is inadequate and muddled".

The Reserve Bank of India will set new regulations on the locker facility management within six months that will be followed by banks across the country, the top court directed on Friday.

"Banks are under the mistaken impression that not having knowledge of the contents of the locker exempts them from (the) liability for failing to secure the lockers in themselves as well. In as much 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," the top court observed while hearing a case linked to the United Bank of India's Kolkata branch.

The verdict was announced in the case of Kolkata-based Amitabha Dasgupta who had moved court as banks officials broke open his locker, claiming that he had missed his dues; he denied the claims. When the bank gave him back his jewels, he was given only two of seven ornaments, he said.

Observing that the banks "cannot impose unilateral and unfair terms on consumers", the top court imposed a fine of ₹ 5 lakh on the United Bank of India for breaking open the locker without informing the customer.  The fine can be recovered from the "erring officials if they are still in service", the court said.

Dasgupta had moved the Supreme against an order of the National Consumer Disputes Redressal Commission (NCDRC), which agreed to the State Consumer Forum's decision to reduce the ₹ 3 lakh compensation – ordered by the District Consumer Forum – to ₹ 30,000. Both the national and state forums were of the view that "the civil court can decide on the loss of the contents.”

Rs 1 lakh will be paid to the petitioner by the bank as "litigation cost", the court further said.

The victim, however, got justice after a 25-year-long struggle. Even in the Supreme Court, the case dragged on for more than a decade as he had filed the appeal way back in 2010.