On January 23, 2023, the Reserve Bank of India (RBI) extended the deadline for banks to complete the process of renewal of agreements for the existing safe deposit locker holders by December 31, 2023 from January 1, 2023.
- The deadline is extended in a phased manner with intermediate milestones of 50% by June 30, 2023, and 75% by September 30, 2023.
- The Banks are provided with a deadline of April 30, 2023, to notify all their customers regarding the revised requirements.
Background:
In August 2021, the RBI had issued revised instructions with respect to the Safe Deposit Locker/Safe Custody Article Facility that required banks to enter into revised agreements with the existing locker holders by January 1, 2023. Click here to know more
- However, there are still a large number of customers who are yet to sign the revised agreement. In many cases, the banks are yet to inform the customers about the same before. Therefore this extension has been provided to banks.
Key Points:
i.Banks have been advised to make necessary arrangements to facilitate the execution of the revised agreements by ensuring the availability of stamp papers, etc.
ii.In cases where operations in lockers have been frozen for non-execution of the agreement by January 1, 2023, the same will be unfrozen with immediate effect.
iii.The revised rules on bank lockers were applicable to existing customers from January 2023 and were already in force for new customers from January 2022.
iv.Banks would report the status of compliance with the instructions on the DAKSH supervisory portal of the RBI
v.Earlier, the RBI had made it mandatory for banks to install CCTVs (Closed-Circuit Television)Â to monitor locker rooms and to store the footage for 180 days, and send SMS (Short Message Service) and emails every time customers accessed their lockers as a step against fraud.
RBI directs SBM Bank (India) to stop all transactions under Liberalised Remittance Scheme
RBI in exercise of its powers under sections 35A and 36(1)(a) of the Banking Regulation (BR) Act, 1949, directed SBM Bank (India) Ltd to stop all transactions under Liberalized Remittance Scheme (LRS) with immediate effect till further orders.
- This decision has been taken due to certain material supervisory concerns observed in the bank.
Key Points:
i.SBM Bank (India) Ltd is a Mumbai (Maharashtra)-based bank that has been operating as a branch of SBM Bank (Mauritius) Ltd since 1994.
ii.On December 1, 2018, it became the first universal bank in India to receive a banking licence from RBI through the wholly-owned subsidiary route.
What is Liberalized Remittance Scheme (LRS)?
i.Under the LRS, Indian residents, including minors, are allowed to freely remit up to USD 2,50,000 per financial year (April – March) for any permissible current or capital account transaction or a combination of both.
ii.LRS is not available to corporations, partnership firms, HUFs (Hindu Undivided Family), trusts, etc.
iii.It was first introduced on February 4, 2004, with a limit of $25,000.
Recent Related News:
i.On December 1, 2022, the Reserve bank of India (RBI) launched its pilot on retail digital currency/ rupee called ‘Digital Rupee – Retail segment (e-R)’, a Central Bank Digital Currency (CBDC) which is an electronic form of sovereign currency.
ii.RBIÂ extended the dispensation of enhanced Held to Maturity (HTM) limit of 23% of deposits in respect of statutory liquidity ratio (SLR) securities up to March 31, 2024 in order to provide further flexibility to banks in managing their investment portfolios.
About Reserve Bank of India (RBI):
i.The Reserve Bank of India was established on April 1, 1935, in accordance with the provisions of the Reserve Bank of India Act, 1934.
ii.The Central Office of the Reserve Bank was initially established in Calcutta but was permanently moved to Mumbai in 1937.
iii.Though originally privately owned, since nationalization in 1949, the Reserve Bank is fully owned by the Government of India.
