RBI norms bar banks from linking locker allotment to ULIP sales

Customers seeking bank lockers in India are being advised to stay alert against being compelled to purchase financial products such as ULIPs, as such practices violate Reserve Bank of India guidelines. Reports of banks allegedly tying locker allotment to insurance or investment purchases have raised concerns over mis-selling in the banking sector.

According to RBI norms, banks must ensure transparency and fairness in providing locker facilities. Experts emphasise that locker allotment cannot be made conditional upon buying third-party products like Unit Linked Insurance Plans. Such bundling is considered an unfair sales practice and is not permitted under regulatory rules.

The central bank has been tightening oversight on mis-selling, proposing stricter measures to prevent banks from pushing unsuitable financial products to customers. Locker access, officials note, should depend only on factors such as availability, completion of KYC requirements, and basic account conditions—not additional purchases.

While banks may require a minimum balance or a fixed deposit as security for locker rent, they cannot legally enforce the purchase of insurance or investment schemes. The issue has gained prominence due to high demand and limited availability of lockers, especially in urban areas. Customers are encouraged to exercise caution, avoid unnecessary financial commitments, and report any coercive practices, as regulators continue efforts to safeguard consumer interests and promote ethical banking practices.