So you got carried away and bought a lot of gold jewellery for your wife and are now hunting for a bank locker to park that jewellery ? Getting bank lockers in India is more painful than buying the jewellery ! Most of the time the banks will say that the safe deposit lockers aren’t available at all !
Banks insist of various conditions on the user to open a locker. But are these conditions mandatory to be imposed ? Or are banks being cheeky and playing safe and in some instances, forcing the user to invest with them as well ?
Bank Safe Lockers
While in my opinion, bank lockers are needed for a larger section of the public, unfortunately the banks allow only the privileged class to use it at their branches. Many banks will ask you to open a fixed deposit before you can open the bank lockers. 99% of the banks do this and the FD asked for is easily Rs 50,000 or Rs 1 lakh.
In case the fixed deposit is something which you resist, they will ask you to invest some amount with them in some other investment avenues. Banks will also ask you to open a savings account with them if you want to operate lockers with them.
Note that it is not mandatory to open any savings account or make any investments with banks to open a bank locker. A safe deposit locker facility is totally independent of any other service the bank offers.
But it is so rampantly used that the Reserve Bank of India (RBI) had to file circulars with banks advising them not to use these tactics on users.
The maximum a bank can ask for is a security deposit of three years’ rental in advance and a one-time breakage charge.
So why do banks do this ? That is because investors are guilty of not using the lockers for years and years together. So the rental charges are not paid to the banks and the bank loses on its income. Forcing a bank safe locker user to open a saving account ensures that the bank can at least debit the rental charges from this account.
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Are lockers really safe ?
The lockers in banks are available in different sizes and operating them is pretty easy. Each locker has two keys; one remains with the bank and the other with the customer. The locker can be opened only when both keys are used. Losing yours could be very costly as the entire lock needs to be replaced and you would have to bear the full cost.
Total privacy of operation and strict confidentiality of contents are two main main advantages of bank lockers.
Many investors open lockers with the assumption that the responsibility of the contents of the locker is now with the bank. Are lockers in banks and their contents safe ?
Essentially banks maintain that they are not responsible for loss or theft of the bank locker contents. The bank even does not know what is parked in its locker so how can it be held responsible ?
So banks do not want to compensate you for loss of locker contents but court rulings have gone against them.
One ruling observed – “the depositors had taken the lockers on rent only because of the security provided by the bank and it is not simply a landlord and tenant relationship.”
And another stated – “persons hire lockers in safe deposit vault to keep their valuable articles and documents therein for their safety. There is risk of valuable articles and documents being stolen in residential or office premises. Therefore, it is to keep them safe from theft or burglary that persons hire lockers in safe deposit vault. Since the company has undertaken the business of running safe deposit vault and hiring lockers, it is its duty to ensure security and safety of lockers.”
RBI has also maintained that banks will be held responsible. Banks have taken insurance to cover for such losses either due to theft or natural calamity like flood or fire. The iron gated strong rooms, electronic surveillance via CCTV and alarm systems are some of the checks banks have put in place to safeguard safe deposit lockers.
All of us do know that the safety precautions and arrangements made by banks are very comprehensive and so the valuables are more safer at the bank than at our homes.
Other points to note on bank lockers
- One needs to keep in writing at home what are the contents of the bank safe lockers. In case of theft, at least you will know what was stolen !
- If you are keeping documents in lockers, it is wise to get them laminated but this isn’t possible for realms of documents, so you might not have a choice here.
- Always operate bank lockers in a joint-holding or nomination based mode. This ensures that in case of death of the person, the contents can be still be operated or smoothly handed over to the legal heirs.
- RBI has stipulated that banks should play a more proactive role in finding the whereabouts of the account holders whose accounts have remained inoperative. It has said that banks needs to ensure that the lockers are operational more frequently.
- Safe deposit lockers in banks are classified in high, medium and low risk categories by the bank. In case you fall in the high risk category and do not operate your safe deposit locker for a year, banks can force it open !
- In India, locker facility is also availed by private players as well.
- The cost of a bank locker can start from as low as Rs 1,000 annually to Rs 40,000 in some cases. It all depends on the size of the locker. Annual charges are taken at the beginning of the year and in case you wish to close your bank locker midway, the money is not refunded.