A retired Government-employee, Ashok, had approached a leading public sector bank for a locker to shift his valuables from an ill-managed co-operative bank.

The bank manager asked him to make a fixed deposit of ₹5 lakh for a small locker. Appalled, he visited another public sector bank that had opened a new branch in the town.

Here, he was given the option to either make a fixed deposit or buy an insurance product. This practice, resorted to by most banks across the country, has been termed as “restrictive” by the RBI.

Though cyberspace has many tales of similar demands made of customers, a manager with a leading public sector bank (who did not want to be named), said, “The locker facility does not earn us much revenue… We also have to meet our yearly deposit targets.” Their burden increases, as bank managers also have to sell a fixed number of insurance products. And since the demand for lockers far outstrips supply, banks use such criteria to select customers.

This practice usually has the approval of the head office, said an official of another public sector bank, defensively.

Even leading private sector banks seem to follow similar criteria for providing lockers. Navneet from Faridabad complained that the bank asked him to buy an “investment product” to get a locker within a week. Else, the waiting period is one year.

According to M Narendra, Chairman and Managing Director, Indian Overseas Bank, “Managers cannot make buying of insurance products or investing in fixed deposits a precondition for allotment of lockers.”

Some new managers may do this under pressure to meet targets, he adds.

However, he points out, nothing stops managers from marketing their products, though they cannot compel customers to buy it. According to the RBI, lockers should be given to customers on a first-come, first-served basis.

Flouting norms

However, banks seem to be flouting this diktat as even a new bank branch (with enough new lockers) of a leading public sector bank was found asking locker-seeking customers for deposits or coaxing them into buy insurance products.

Last July, the RBI had said, “Linking the locker facility with placement of fixed or any other deposit, beyond what is specifically permitted, is a restrictive practice and should be prohibited forthwith.”

Banks are allowed to charge an annual rent from the customer for maintenance of the locker.

The charges depend on the size of the locker and vary from ₹1,000 to ₹5,000.

The RBI, in fact, has allowed banks to take annual rent of three years upfront from customers (in the form of a fixed deposit) to cover costs arising from non-payment of charges from customers.

In case lockers are not available, the RBI has asked bank branches to maintain a wait-list for the allotment of lockers, to ensure transparency in its allotment.

The guidelines , in the interest of customers, the RBI should keep a closer watch on banks and the manner in which they farm out their lockers.

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