Safe Deposit Locker Policy

Preamble

The Safe Deposit Locker Policy has been framed with the approval of the Board. The premise of this policy is based on the RBI’s Master Circular No. RBI/2021-2022/86 DOR.LEG.REC/40/09.07.005/2021-22 dated August 18th, 2021, regarding various operational and procedural guidelines for Safe Deposit Locker issued by the RBI from time to time. This policy contented the guidelines to Bank and customer on the procedure to be followed in dealing with Safe Deposit Locker operation. This policy will be applicable to all the branches of Shivalik Small Finance Bank (the “Bank”).

Objective

The objective of the policy is to lay down the principles to be followed during lifecycle of a safe deposit locker.

Advantages of storing the valuables in a Safe Deposit Locker

• A customer can store valuables such as jewelry, important documents, etc. to protect it against theft.
• One can nominate or appoint a family member as joint or POA holder to operate the locker in his/her absence.
• Total privacy is maintained in a bank locker as bank officials do not see what you keep inside your locker.
• Each entry in locker room is under CCTV surveillance and security.

Concept of a Safe Deposit Locker

A safe deposit locker is referred as locker in this policy, is an individually secured container, usually held within a larger safe or bank vault. Safe deposit boxes are generally located in banks, post offices or other institutions. Safe deposit boxes are used to store valuable possessions, such as gemstones, precious metals, currency, marketable securities, luxury goods, important documents (e.g., wills, property deeds, or birth certificates), or computer data, that need protection from theft, fire, flood, tampering, or other perils. Bank lockers are one of the safest options to keep your jewellery and important papers safe. Lockers are made of high-quality thick steel/metal plates with screws fitted on them making it difficult for robbers to break open. The lockers are enabled with locks which ensures that the locker cannot be opened in single capacity and requires presence of bank staff as well as customer thereby reducing the chances of misuse.

Issuance/Allotment of Locker

Locker Issuance

• The facilities of safe deposit locker shall be given after complying with the customer due diligence (CDD) criteria under the Master Direction – Know Your Customer (KYC) Directions, 2016 (as updated from time to time) and subject to on-going compliance.
• The due diligence will be carried out for all the customers in whatever rights and capacities they may be hiring the locker.
• For existing customers also, the lockers shall be issued subject to them being KYC Compliant.
• Photographs for each locker hirer and individual(s) authorised by locker hirer(s) would be collected as part of locker issuance process.
• If the lockers are not available for allotment, then the Bank would provide a wait list number to the applicant.              

Locker Allotment

• At the time of allotment of the locker to a customer, the Bank will enter into a duly stamped Locker agreement with the customer to whom the locker facility is provided.
• A copy of the locker agreement in duplicate signed by both the parties will be furnished to the locker-hirer to know his/her rights and responsibilities.
• Original agreement will be retained with the respective branch where the locker is situated.
• If the lockers are not available for allotment, then the bank shall provide a wait list number to the locker applicant.

Locker Agreement

The Bank shall have Board approved locker agreement, amongst other clauses, will include the following:

• The locker hirer/s will not keep anything illegal or any hazardous substance in Safe Deposit Locker. If the Bank suspects such deposits in the locker, then the Bank will have right to take appropriate action against the customer as it deems fit and proper in the circumstances.
• The Bank will have the discretion to break open any locker if the rent has not been paid by customer for three years in a row. The Bank will notify the locker-hirer prior to the break open and give reasonable opportunity to withdraw the articles deposited by locker-hirer post payment of the dues.
• If the locker remains inoperative for a period of seven years and the locker-hirer cannot be located, even if rent is being paid regularly, the Bank will be at liberty to transfer the contents of the locker to their nominees/legal heir or dispose of the articles in a transparent manner, post following due procedure as required.
• The Bank will be discharged of any liability in case the locker is not in operation and the locker is opened by the Bank and contents released as per the law and as per the instructions issued by the Reserve Bank and the terms and conditions prescribed in the agreement.
• As the Bank does not keep a record of the contents of the locker or of any articles removed therefrom or placed therein by customer, the Bank would not be under any liability to insure the contents of the locker against any risk whatsoever.

Locker Rent

Bank collects rent for providing the service of locker facility. The rent and service charges will be decided by the Bank, depending on the locker size which is subject to change.

• The rent tariff and related service charges will be advised to the customers suitably at the time of allotment. The same will also be available at all branches/website .
• The Locker Rentals are advised to the customers at time of locker allotment. The rentals are decided by the Bank, depending on the locker sizes.
• The rentals are collected annually in advance, on a pro-rata basis upto the end of corresponding financial year.
• For new locker allotments, bank can obtain Fixed Deposit as security from customers, which will cover 3 years’ annual locker rent plus locker break-open charges for mitigating the potential risk scenarios where the locker-hirer neither operates the locker nor pays the rent.

Security Standards and Infrastructure

• The Bank will ensure that the identification Code of the Bank / Branch is embossed on all the locker keys with a view to facilitating identification of lockers / locker ownership by law enforcement agencies in case of need. The Bank will permit the locker-hirer to operate the locker only with the key provided by the Bank.
• Where mechanical lockers are to be installed by the Bank, these will conform to basic standards / benchmarks for safety and security as prescribed by Bureau of Indian Standards (BIS) or any other enhanced industry standards applicable in this regard.
• The Bank will take necessary steps to ensure that the area in which the locker facility is housed is properly secured to prevent criminal break-ins. Branches will have a single defined point of entry and exit to the locker room/vault.
• As per the Bank’s internal security policy, branches may cover the entry and exit of the strong room and the common areas of operation under CCTV camera and preserve its recording for a period of not less than 180 days.
• The internal auditors, as part of Administration and Branch audit, will verify the security measures and report the compliance to ensure that the procedures are strictly adhered to.

Nomination Facility and Settlement of Claims

Nomination Facility

• Bank will offer nomination facility in case of safe deposit lockers, in accordance with the provisions of section 45-ZC to 45-ZF of the Banking Regulation Act, 1949 and Banking Companies (Nomination) Rules, 1985.
• In case the nominee is a minor, the same procedure as prescribed for the Bank accounts will be followed by the Bank. A passport size photo of the nominee attested by the customer may be obtained from the customer, at his/her option and preserved in the records.
•  Thumb-impression(s) on Nomination form will be required to be attested by two witnesses. Signatures of the account holders need not be attested by witnesses.
•  The Bank will provide acknowledgment of request received towards Nominee addition, cancellation and / or variation. The Bank shall register the request made by locker hirers for nomination, cancellation and/or variation in their records.

Settlement of claims

• The Bank will settle dues in case of deceased locker hirer/s in line with the Board approved Deceased Claim Policy. The claim formats and guidelines for processing of claims will be covered in Deceased Claim Policy .
• The Bank will settle the claims in respect of deceased locker hirers and release contents of the locker to survivor(s) / nominee(s), as the case may be, within a period not exceeding 15 days from the date of receipt of the claim subject to the production of proof of death of the depositor and suitable identification of the claimant(s) with reference to nomination, to the Bank's satisfaction.
• The Bank will report to the Customer Service Committee of the Board on quarterly basis the details of claims processed and those pending beyond the stipulated period, with reasons thereof.

Access to the Articles in the safe Deposit Lockers

• If the sole locker hirer nominates an individual to receive the contents in the locker, in case of his death, after verification of the death certificate and satisfying the identity and genuineness of such individual, the Bank will give access of the locker to such nominee with liberty to remove the contents of the locker, after an inventory is taken in the prescribed manner.
• In case the locker was hired jointly with the instructions to operate it under joint signatures, and the locker hirer(s) nominates any other individual(s), in the event of death of any of the locker hirers, the Bank will give access of the locker and the liberty to remove the contents jointly to the survivor(s) and the nominee(s) after an inventory is taken in the prescribed manner.
• In case the locker was hired jointly with survivorship clause and the hirers instructed that the access of the locker should be given to "either or survivor", "anyone or survivor" or "former or survivor" or according to any other survivorship clause permissible under the provisions of the Banking Regulation Act, 1949, the Bank will follow the mandate in the event of death of one or more of the joint locker-hirers

The Bank will ensure the following before giving access to the contents to nominee / survivor:

•  Bank shall make diligent effort to find out and ensure there is no order or direction from Courts/Forums restraining it from giving access to the locker of the deceased; and
• Make it clear to the survivor(s) / nominee(s) that access to articles in the locker is given to them only as a trustee of the legal heirs of the deceased locker hirer i.e., such access given to them will not affect the right or claim which any person may have against the survivor(s) / nominee(s) to whom the access is given.

Locker Operations

• Access to the lockers should be permitted to hirers only after proper verification of their identity and recording of the authorization by the official The bank shall maintain a record of all individuals, including the locker-hirers, who have accessed the lockers and the date and time (both check-in and check-out time ) on which they have opened and closed the locker in system and obtain their signature in register.
• Bank will send an Email and SMS alert to the registered email id and mobile number of the customer before the end of day as positive confirmation intimating the date and time of the locker operation. Redressal mechanism is available in case of unauthorized locker access

Closure and Discharge of locker items

The breaking open of the locker in a manner other than through the normal access by the customer using her/his original key or password can be carried out under any one of the following circumstances:

•  If the hirer loses the key and requests for breaking open the locker at her /his cost; or
• Bank shall have the discretion to break open any locker if the rent has not been paid by customer for three years in a row.
• If the locker remains inoperative for a period of seven years and the locker-hirer cannot be located, even if rent is being paid regularly, the bank shall be at liberty to transfer the contents of the locker to their nominees/legal heir or dispose of the articles in a transparent manner.
• If the Government enforcement agencies have approached the Bank with orders from the Court or appropriate competent authority to seize lockers and requested for access to the lockers; or
• If the Bank is of the view that there is a need to take back the locker as the locker hirer is not cooperating or not complying with the terms and conditions of the agreement.

Liability for Bank

It is Bank duty to  take care and to exercise due diligence in maintaining and operating their locker. The duty of care includes ensuring proper functioning of the locker system, guarding against unauthorized access to the lockers and providing appropriate safeguards against theft and robbery.

• Bank shall not be liable for any damage and/or loss of contents of locker arising from natural calamities or Acts of God like earthquake, floods, lightning and thunderstorm or any act that is attributable to the sole fault or negligence of the customer. Banks shall, however, exercise appropriate care to their locker systems to protect their premises from such catastrophes.
• In instances where loss of contents of locker are due to incidents such as fire, theft/ burglary/ robbery, dacoity, building collapse arising due to banks own shortcomings, negligence and by any act of omission/commission or attributable to fraud committed by its employee(s), the banks’ liability shall be for an amount equivalent to one hundred times the prevailing annual rent of the safe deposit locker.
• The Board authorizes Executive Committee to decide for the amount as compensation towards any loss of damage for the contents of locker due to Bank’s own negligence or for the reasons mentioned above.

Risk Management, Transparency and Customer Guidance

• The Bank will have an insurance policy to cover its Branches for minimizing the loss due to incidents like robbery, fire, natural calamities, loss during shifting/merger of branch, etc., affecting contents of lockers.
• Bank directly or indirectly will not offer any insurance product to its locker hirers for insurance of locker contents.
• The bank will display locker agreement with all Terms and conditions and Policy on the Bank’s website. The process document will also be made available at Branches where facility is being provided for public viewing.
• The bank will display information on locker rentals on the Bank ‘s website.

Annexures

Locker agreement has been redesigned to facilitate branches to keep all the details of the customer in a precise manner. Also, all the annexures related to Lockers are redesigned and issued under a master circular with locker agreement. All are requested to take a printout of Agreement at the time of locker issuance. Branches are strictly advised not to use previous agreement from immediate effect.

Review of the policy

Any changes to the policy will be approved internally through the relevant Board approved committee. The policy as a rule will be reviewed at the Board level once a year. "If there is a major change made, it will be ratified by the Board in the next meeting.

The process note for locker issuance and operation will be reviewed and approved by ORMC towards any changes/ modification as and when required.