Exercise caution before you sign up for a bank locker

Parvatha Vardhini C.
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Lockers are not fool-proof and banks may not also compensate you for theft or loss of contents or for damage beyond their control.

Bank lockers help us keep documents and valuables safe. But getting one may be a difficult task. While hunting for lockers, keep in mind that banks don’t have uniform rules on this facility. So it is wise to counter check on the following aspects before choosing a locker.

No standard norms

First, banks don’t have uniform norms for allotment. On paper or on their Web sites, many banks state that the criterion for allotment of lockers is that you should be a savings/current account holder of that bank.

In addition, Reserve Bank of India’s ‘Master Circular on Customer Service’ (available on the RBI Web site) allows banks to obtain a fixed deposit which would cover three years’ rent and charges for breaking open in case of an eventuality.

But in reality, you may not get a locker even if you fulfil both requirements.

To consider your case favourably, most banks ask you to open a fixed deposit for a sum more than the three year rent rule, or make investments in other avenues such as ULIPs. Sometimes, even if lockers are available, banks may not be willing to allot them to all and sundry.

Bank of Baroda, for example, explicitly states that while 80 per cent of its lockers will be allotted according to the ‘wait list’ which RBI mandates all banks to maintain, 20 per cent will be allotted according to the discretion of the branch manager having regard to business considerations. Similarly, business considerations might supersede when banks open new branches with locker facilities.

Differential charges

Second, banks don’t have uniform charges. Branches of the same bank, even within the same city, may have differential hire charges for lockers. Rentals across public and private sector banks vary anywhere between Rs 1,000 and Rs 45,000, depending on the size of the locker, the city, locality. Besides service tax, some may add administrative charges to the locker rents.

While all banks require you to pay the rent upfront for at least one year, many offer a discount if you pay three years’ rent in advance. Some banks also offer discounts to holders of certain type of accounts. For example, IDBI Bank offers a 25 per cent discount on annual locker rent for Super Shakti Women’s Account, Jubliee Plus and Power plus account holders. But the discount will be credited to their account at the end of the year only if they have maintained the required AQB (average quarterly balance) for that type of account. Penalty for late payment of rentals is charged in some cases. On surrendering lockers too, the norms vary. While HDFC Bank, for example, does not refund the rent in case you surrender it mid-way, ING Vysya Bank has rules for proportionate refunds on surrender. Third, banks don’t have uniform access rules.

Varying access rules

Predominantly, lockers can be accessed during the business hours of the bank. But few such as Axis have extended hours for lockers. Still better, IDBI Bank boasts of a select 24*7 locker facility.

In terms of the frequency of access, you can normally access the locker 12-15 times in a year.

More frequent access may attract additional charges in some banks. For infrequent users, the locker must be accessed at least once in six months/one year.

Banks may incorporate a clause in the locker agreement stating that if the locker remains inoperative for more than a year, it has the right to cancel the allotment and open the locker, even if rent is paid regularly. Fourth, and most important, banks don’t have foolproof security.

Security not foolproof

Yes, it would be better if your banker has installed burglar alarms and CCTV cameras, but not all banks have them.

Although there are rulings of the National Consumer Disputes Redressal Commission favouring the customers in case of theft/loss of the contents of a locker, banks may not entertain all claims.

They may take cover under the fact that the relationship between the customer and the banker is considered as one between a landlord and tenant; and therefore, the bank is not responsible for the contents of the locker. Besides, banks may not compensate you in case the contents of the locker are damaged/destroyed due to factors beyond their control such as flooding or fire.

(This article was published on February 9, 2013)
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