Seal it, lock it, forget it? Bank lockers aren’t entirely risk-free

The recent incident involving a breakout of fire at a Punjab National Bank branch has raised many questions in our minds about the safety of the items we keep for safeguarding in a bank locker. It must be clarified here that nothing damaging occurred and the safety lockers were not harmed and they are anyway expected to be fire proof and safe.

But still, the question of supreme safety remains! Is it safe? What happens in case the locker is destroyed along with our valuables due to whatever reasons? This article tries to help us understand the answers to the above questions.

For long, bank lockers have been the first choice to safeguard valuables for most Indians and they continue to be the safest option. To hire a bank locker, one has to be above 18 years and some bankers ask you to open a savings account with them. The lockers provided are of different sizes and we can choose the size based on our requirement. The deposit amount and charges vary from bank to bank. Banks have made the nomination or joint ownership compulsory while hiring a locker. The customer will receive a ‘memorandum of letting’, which is a document that states the details while hiring the locker.

The lockers have two keys each, where the bank has one and the other remains with the customer; one can open the locker only when both keys are used.

It is believed that bank lockers are the safest places to keep your valuables due to their total privacy in operations and secrecy of the content. However, it’s only the strongest “belief” of banks that valuables kept in lockers will be safe, they state that there is no other place as safe as lockers but they seem to be completely irresponsible if your valuables go missing! Their argument is the relationship between a person hiring the locker and the bank is like that of a proprietor and tenant. The bank actually does not know what is kept in lockers, so they do not want to compensate if contents of the locker are missing.

The basic premise behind the banks shying away from responsibility is the fact that they do not want to know what’s inside the locker, and how can they be sure your claim is correct in case of an issue?

What does the RBI say about the locker policies?

The RBI policy states: “The bank will, in no way, be responsible / liable for the contents kept in the locker by the hirer. In case of theft, burglary or similar unforeseen events, action will be initiated as per law.” The central bank has also said even if banks do not have an idea about contents of the locker, they should take necessary steps to protect the same. There were also a few cases in the past where the victim has received compensation on loss or damage of locker contents.

Case laws regarding compensations:
Punjab National Bank, Bombay, vs K V Shetty (FA No 7 of 1991)
Here the person found the contents (jewellery) of his locker to be missing and received a compensation of `1,26,017, along with interest calculated at the rate of 18%, through the consumer court. The bank claimed that it was not responsible for the loss as per the agreement signed, but the National Commission dismissed the bank’s argument.

Bank of India vs Smt Kanak Choudhary, (RP no 889 of 2000)
Here, the customer filed a case stating that termites had destroyed the currency notes and important papers kept in a locker. The commission said the bank “was bound to ensure that the respondents’ locker remained safe in all respects” and awarded compensation to the customer

How to ensure your bank locker safety
If you have your valuables in the locker, make sure your bank has all the necessary security measures such as alarm system, iron-gated rooms, and electronic surveillance via CCTV in place. Visit your locker frequently and ensure your valuables are safe, frequent locker visit is what banks and the RBI expect from customers.

The important aspects to be considered are the terms and conditions regarding the locker hiring process. Read these before you hire lockers. Try to make a list of all the things you are planning to keep in your locker. This record will help you calculate the value of the contents and if the contents are missing, you can identify the same easily, which will help you claim your compensation. Always open your locker after the bank employee who accompanies you to the vault leaves the place. Also, ensure the locker is properly locked before you leave the vault.

The safety measures provided by banks are more secure than our homes, but banks not taking responsibility of contents acts as an obstruction for many to hire a locker. At the same time, we also need to appreciate that with modern technology and safety measures, an incidence of valuable document being destroyed or personal belongings going missing from a locker has a probability of a one in a billion times. Not much really!

The writer is CEO, BankBazaar.com