Observation of ferroelectricity among non-d(0) systems, which was believed for a long time an unrealistic concept, led to various proposals for the mechanisms to explain the same (i.e. magnetically induced ferroelectricity) during last decade. Here, we provide support for ferroelectricity of a displacive-type possibly involving magnetic ions due to short-range magnetic correlations within a spin-chain, through the demonstration of magnetoelectric coupling in a Haldane spin-chain compound Er2BaNiO5 well above its Néel temperature of (TN = ) 32 K. There is a distinct evidence for electric polarization setting in near 60 K around which there is an evidence for short-range magnetic correlations from other experimental methods. Raman studies also establish a softening of phonon modes in the same temperature (T) range and T-dependent x-ray diffraction (XRD) patterns also reveal lattice parameters anomalies. Density-functional theory based calculations establish a displacive component (similar to d(0)-ness) as the root-cause of ferroelectricity from (magnetic) NiO6 chain, thereby offering a new route to search for similar materials near room temperature to enable applications.