Banks are the custodians of public property and they cannot “leave their customers behind” by claiming ignorance about the contents of their lockers, the Supreme Court said Friday, adding that the current state of regulation in locker management is “inadequate and messy”. As directed by the apex court on Friday, the Reserve Bank of India will set new rules on locker facility management within six months.
“Banks have the misconception that those who do not know the contents of the locker have (but) absolved themselves of the responsibility of failing to protect the lockers. During the hearing, the apex court observed that “lawsuits between banks and lockers will continue in this vein.”
A customer of a bank named Amitabh Dasgupta said that the branch officials claimed that he had missed his dues; He has denied the claim. When the bank returned his gems, he was given only two of the seven ornaments, he said.
He then moved the apex court against the order of the National Consumer Dispute Settlement Commission (NCDRC), which upheld the decision of the State Consumer Forum to reduce the ₹ 3 million compensation in the District Consumer Forum order – to 30,000. The idea of both the national and state forums was, “Civil courts can decide on content reduction”.
The apex court has imposed a fine of Rs. 5 lakh on United Bank of India for unlocking the locker without informing the customer, observing that banks cannot impose unilateral and unfair conditions on customers. “Wrong officers can be fined even if they are employed,” the court said.
The court further said that the applicant would be paid Rs one lakh by the bank as “litigation costs”.
“There is no uniformity in the way each bank has its own system. If a person’s locker is open in front of the bank and the contents of the locker are disputed, what is his liability?” The apex court asked while reprimanding the concerned officials.
In setting strict guidelines, in which the customer must break the locker and the negligent ones must break it only in the presence of an authorized officer and an eyewitness, the apex court said the rules laid down by the court will be governed by the central bank until new regulations come into force.
A bench comprising Justice MM Shantanagoudar and Binit Saran said banking institutions have played a vital role in the lives of the common man as both domestic and international economic transactions have more than doubled since the onset of globalization. The apex court said that “we are steadily moving towards a cashless economy” and that people are reluctant to keep their liquid assets at home.
The summary of what the court said in locker management is that there are eight issues:
- The customer must be informed before opening the locker
- The RBI must make rules on locker management within six months
- The RBI may also make rules regarding the bank’s liability for loss of locker material
- Banks cannot avoid liability if it does not know the contents of the locker
- As protectors of public property, banks cannot claim ignorance about locker contents and supervise customers.
- United Bank of India has ordered to pay five lakh dollars as compensation to a customer whose locker has been broken.
- Banks must deduct this amount from the salaries of officials