Recently one of my acquaintances went to a bank branch to avail safe deposit locker facility. Though he is an account holder of the branch, yet he was asked to park Rs.50,000 in one of the fixed deposit schemes of the bank. Precisely, it was a pre-condition to avail the locker facility. Since my acquaintance had no such extra money to keep it in a fixed deposit scheme, the branch refused to extend him the locker facility.
          Here arises an important question. Do bank customers need to open a fixed deposit account to avail the locker facility? As far as rules and regulations are concerned, there is no such pre-condition in place to avail locker facility. Reserve Bank of India (RBI) has asked banks to desist from such practices. The maximum a bank can take as security is a fixed deposit of an amount which equals three years' rental and breakage charges. This is simply a safeguard in case a customer can't be contacted for a long period. Even it is also not mandatory to open an account with the bank for availing locker facility, but opening a savings bank account or current account will lead to operational convenience in rent recovery and servicing of the locker. But opening a fixed deposit is never a condition for availing the locker facility.
          How safe is bank locker? This is a question which haunts every customer. Answer is very simple. Safe deposit locker is as safe as a bank branch since the articles in the locker are as vulnerable to natural calamities, theft and burglary as the bank's branch. However, the safety precautions and arrangements made by banks are comprehensive. So the articles are relatively safer at the bank than at home.
         A locker, by itself, does not ensure the safety of goods. It's the safety infrastructure created by the bank that makes it secure. As banks are entrusted with the task of safeguarding public wealth, they have multiple layers of security in place, such as quality locks, strong room, electronic surveillance, alarm systems, regular policing and internal and external audit to ensure consistent quality of service. Despite this, there have been instances in the past of bank robberies or natural disasters resulting in huge losses.        Some readers have desired information about the position of locker holder losing his precious item deposited in the locker in any mishap and some have asked about the status of legal heirs and nominees of a locker hirer in the event of his death
          Obviously, the customers feel very safe while depositing their valuables in the bank locker, considering the level of security and vigil ensured by the bank. But some recent incidents in which locker holders lost their belongings like gold ornaments and other valuables have startled the customers as to how safe their belongings kept in the safe deposit lockers of the banks are. 
          Who will take the responsibility of such mishaps? This is a question that has come up on numerous occasions.
          The straight answer is that the bank is not liable in case of any untoward incident for the materials kept in the locker (since its contents are not disclosed to the bank). Generally, banks do not take the responsibility of compensating a customer in such cases. The legal argument taken by the banks is that there is no 'entrustment' of contents placed in lockers by the depositor to the bank. The banks keep no account of the things a customer deposits there, for it is supposed to be a secret, which he/she shares with no one. Not even the bank. Consequently, the bank has no way of finding out if the locker holder is lying about the loss he or she has incurred. Therefore, the banks aren't responsible for its contents.
          Notably, at the time of taking possession of the locker, the customer signs to abide by the terms and conditions envisaged in the agreement like, “the bank will not be held liable or responsible for any loss or damage to any article, document, or valuables deposited in the locker as a result of theft, robbery, fire or any other incident or pilferage.” This clause means that the bank is not responsible and may shrug off the liability of compensating the customers. Moreover, if the customer claims compensation for his loss, the bank cannot estimate it because the bank does not know the real value of the items kept in a locker.
          So, it is a catch-22 situation for the customer. Banking regulations clearly mention that the bank will have no knowledge of the contents of the locker, which means the items can’t be listed. This limits the consumer’s options in the sense that in the event of any theft or loss they can go to court but won’t have any evidence to back-up their claims.
          However, the matter deserves a closer look on the part of banks since the customers' right to security cannot be ignored. In this regard, RBI has clarified that the relationship of a bank and the locker hirer is that of a bailer and a bailee. So, the bank has to take utmost care for the security of the lockers.  The Reserve Bank of India has asked the banks to review the systems in force for operation of safe deposit vaults and locker at their branches on an on-going basis and take necessary steps. The security procedures should be well documented and the concerned staff should be properly trained in the procedure.
          Now, the issue of making inheritance hassle-free. How the nominees or legal heirs in the event of death of a locker holder, can access to the safe deposit locker and seek possession of safe custody articles? There are two types of locker holders – sole locker hirer and joint locker hirers. If the sole locker hirer nominates a person banks should give to such nominee access of the locker and liberty to remove the contents of the locker in the event of the death of the sole locker hirer. In case the locker was hired jointly with the instructions to operate it under joint signatures, and the locker hirer nominates person, in the event of death of any of the locker hirers, the bank should give access of the locker and the liberty to remove the contents jointly to the survivor(s) and the nominee(s). In case the locker was hired jointly with survivorship clause and the hirers instructed that the access of the locker should be given over to 'either or survivor', 'anyone or survivor' or 'former or survivor' or according to any other survivorship clause, banks should follow the mandate in the event of the death of one or more of the locker-hirers.
          However, it should be clear to the survivor(s) and nominee(s) that access to locker and safe custody articles is given to them only as a trustee of the legal heirs of the deceased locker hirer i.e., such access given to him shall not affect the right or claim which any person may have against the survivor(s) and nominee(s) to whom the access is given.
          Lastly I would suggest some safety measures in connection with safety of the lockers.  As far as possible, you should always keep the invoice of the article kept in the locker with you. Maintain inventory copies, both in the locker and at your home. If you have to keep some documents in the locker, wherever possible, get them laminated and keep photocopies at your home. Before you operate your locker, ensure that the bank official has left the area and you are alone. Keep an inventory of the things kept in the locker, so that you can keep track of every visit. Before leaving, ensure that the locker is properly locked. Ensure that nothing else is left behind. The hirer has to inform the custodian once the operation is complete before leaving the premises.

 (The views are of the author & not the institution he works for.  Feedback:  sajjadbazaz@greaterkashmir.com)

Lastupdate on : Sun, 15 May 2011 21:30:00 Makkah time
Lastupdate on : Sun, 15 May 2011 18:30:00 GMT
Lastupdate on : Mon, 16 May 2011 00:00:00 IST