Banks can’t ditch responsibility on lockers: SC

Banks can’t wash their arms of any legal responsibility if any hurt is brought on to their prospects’ lockers or protected deposits in an period when miscreants can manipulate know-how to achieve entry to electronically-operated financial institution lockers, the Supreme Court noticed in a judgment on Friday.

Ditching responsibility wouldn’t solely make banks chargeable for authorized motion below the Consumer Protection Act, but in addition harm investor confidence and hurt the nation’s status as an rising economic system, a 41-page judgment by a Bench led by Justice Mohan M. Shantanagoudar famous.

The courtroom gave the Reserve Bank of India (RBI) six months to put down “comprehensive directions mandating the steps to be taken by banks with respect to locker facility/safe deposit facility management.”

“Banks should not have the liberty to impose unilateral and unfair terms on the consumers. In view of the same, we direct the RBI to issue suitable rules or regulations within six months from the date of this judgment,” Justice Shantanagoudar ordered.

The courtroom mentioned technological developments had seen the locker system transfer from the outdated dual-key operated ones to electronically operated lockers.

However, within the new system, the shoppers had solely partial entry to their lockers by way of passwords or ATM pin, and many others.

“They [customers] are unlikely to possess the technological knowhow to control the operation of such lockers. On the other hand, there is the possibility that miscreants may manipulate the technologies used in these systems to gain access to the lockers without the customers’ knowledge or consent. Thus, the customer is completely at the mercy of the bank, which is the more resourceful party, for the protection of their assets,” the apex courtroom famous.

In such a scenario, banks can’t shrug off their legal responsibility to maintain the belongings of their prospects protected.

“The very purpose for which the customer avails of the locker hiring facility is so that they may rest assured that their assets are being properly taken care of,” the judgment mentioned.

The judgment got here on an attraction filed in opposition to the Union Bank of India. It involved the financial institution workers “inadvertently” breaking open the locker of a buyer in 1994.

The courtroom mentioned banks play a big position with the arrival of globalisation, particularly when the nation is transferring in the direction of a “cashless economy” and persons are hesitant to maintain their liquid belongings at house as was the case earlier.