The Reserve Bank of India (RBI) has extended the time for banks to complete the renewal of agreements for existing safe deposit locker or safe custody article facilities to June 30, 2023 and December 31, 2023.

The central bank in its circular on August 18, 2021, had issued revised instructions about safe deposit lockers that required banks to enter into revised agreements with the existing locker holders by January 1, 2023.

The RBI says since many are yet to sign the revised documents, the deadline has been extended. "However, it has come to the notice of RBI that a large number of customers are yet to sign the revised agreement. In many cases, the banks are yet to inform the customers about the need to do so before the stipulated date (January 1, 2023)."

The central bank said accordingly, banks have been asked to complete the process in a phased manner by December 31, 2023, with intermediate milestones of 50% by June 30, 2023, and 75% by September 30, 2023.

The RBI has also advised banks to make necessary arrangements to facilitate the execution of the revised agreements by ensuring the availability of stamp papers, etc.

The RBI said frozen lockers will also be unfrozen with immediate effect. "In cases where operations in lockers have been frozen for non-execution of the agreement by January 1, 2023, the same shall be unfrozen with immediate effect."

The RBI said IBA (Indian Banks' Association) is being advised separately to review and revise the model agreement to ensure it complies with the requirements of the circular issued on August 18, 2021, and circulate a revised version to all banks by February 28, 2023. "There may be instances, where the revised agreements already executed in pursuance of the circular dated August 18, 2021, are at variance with this revised IBA Model Agreement. In such cases, all the provisions of the said circular of the RBI, in particular Part VII thereof on compensation policy/liability of banks, shall continue to apply to banks even if not explicitly stated in the agreements already executed."

In such cases, says the RBI, banks will have the option to execute fresh agreements or revise them through supplementary agreements. The cost of stamp paper in such cases may be borne by the banks, it said. In its August 18, 2021, circular, the RBI revised instructions regarding safe deposit locker or safe custody article facility. Under this, banks were mandated to furnish revised agreements with the existing locker holders.

The existing customers of a bank, who have made an application for locker facility and who are fully compliant with the RBI's CDD criteria, can be given the facilities of safe deposit lockers or safe custody articles, subject to ongoing compliance.

Separately, the Reserve Bank of India has directed SBM Bank (India) Ltd to stop, with immediate effect, all transactions under Liberalised Remittance Scheme (LRS) till further orders. This action has been taken after "certain material supervisory concerns observed in the bank", the central bank said.

Follow us on Facebook, Twitter, YouTube & Instagram to never miss an update from Fortune India. To buy a copy, visit Amazon.