Banks cannot open the locker without informing the customer, the superior court said. (Figurative)
New Delhi:
Banks are the custodians of public property and “cannot leave their clients in the lurch” by alleging ignorance of the contents of their lockers, the Supreme Court said today, noting that “(the) current state of regulations on the management of lockers is inappropriate and muddled. ” The Reserve Bank of India will establish new regulations on the management of locker facilities within six months that will be followed by banks across the country, the high court ordered today.
“Banks are under the mistaken impression that not having knowledge of the contents of the locker exempts them from (the) responsibility for not securing the lockers themselves as well. As we are the highest court in the country, we cannot allow that the litigation between the bank and the locker owners continues along these lines, “observed the higher court while hearing a case involving the Calcutta branch of the United Bank of India.
Amitabha Dasgupta, a customer of the bank, had said that his locker was broken after branch officials claimed that he had not paid his fees; denied the claims. When the bank returned her jewelry, they gave her only two of the seven ornaments, she said.
He then moved to the higher court against an order from the National Consumer Dispute Remedy Commission (NCDRC), which accepted the decision of the State Consumer Forum to reduce compensation from Rs 3 lakh – ordered by the District Consumer Forum – to Rs 30,000. Both the national and state forums expressed the opinion that “the civil court can decide on the loss of content.”
Noting that banks “cannot impose unilateral and unfair conditions on consumers”, the high court imposed a fine of Rs 5 lakh on the United Bank of India for breaking the locker without informing the customer. The fine can be recovered from “officials who make a mistake if they are still on duty,” the court said.
The bank will pay one lakh of rupees to the petitioner as a “cost of litigation,” the court further said.
“There is no uniformity in the procedure and each bank has its own procedure. What happens if the bank breaks the locker and the contents of the locker are disputed? Whose responsibility is it?” the higher court asked while reprimanding the officials involved.
By setting strict guidelines, including that the customer must be informed if the locker must be broken, and lockers must be broken only in the presence of authorized officials and an independent witness, the higher court said that the rules set by the court will operate until the central bank introduces new regulations.
With the advent of globalization, banking institutions have acquired a very important role in the life of the common man, as national and international economic transactions within the country have increased on multiple occasions, said a bank comprising justices MM Shantanagoudar and Vineet Saran. The superior court said people are hesitant to keep their assets liquid at home as “we are constantly moving towards a cashless economy.”
Here are the eight points that summarize what the court said about the management of the lockers:
- The customer must be informed before opening the locker.
- The RBI must establish rules within six months regarding locker management.
- The RBI may also establish rules on the bank’s liability for the loss of locker contents.
- Banks cannot avoid responsibility for not knowing the contents of the locker.
- Banks, as custodians of public property, cannot plead ignorance of the contents of lockers and leave customers in the lurch
- United Bank of India ordered to pay Rs 5 lakh to customer as compensation whose locker was broken
- Banks must deduct the amount from the salary of officials.
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