BANK LOCKER FACILITY / SERVICE IN INDIA
Who is liable on theft in Bank lockers ?
Bank Locker Rules prescribed by RBI
DEADLINE EXTENDED FOR OBTAINING FRESH AGREEMENTS FOR BANK LOCKERS :
DATED 24.01.2023 : The Reserve Bank of India, vide its circular dated August 18, 2021, had issued revised guidelines to the banks for hiring out Lockers and banks were required banks to enter into revised agreements with the existing locker holders by January 1, 2023.
Large number of customers are yet to sign the revised agreement and In many cases, the banks are yet to inform the customers about the need to do so before the stipulated date (January 1, 2023). Hence RBI has decided to extend the deadline for banks to complete the process of renewal of agreements for the existing safe deposit lockers in a phased manner by December 31, 2023, with intermediate milestones of 50 per cent by June 30, 2023, and 75 per cent by September 30, 2023. Further, banks have been advised to make necessary arrangements to facilitate execution of the revised agreements by ensuring the availability of stamp papers, etc.
Further, in cases where operations in lockers have been frozen by the banks for non-execution of agreement by January 1, 2023, RBI has asked the banks to unfrozen the account with immediate effect. .
LATEST GUIDELINES FROM RBI ( Effective from 1st, January 2022 ) ON LIABILITY OF BANKS :
1. Banks are liable for losses occurring to a customer hiring a locker for happenings like fire, theft, burglary, dacoity, robbery, building collapse or in case of fraud committed by the employees of the bank . However the liability of banks is limited to 100 times annual rent charged as rent for the lockers .
But the bank will not be liable for any damage and/or loss of contents of locker arising from natural calamities or Acts of God like earthquake, floods, lightning and thunderstorm or any act that is attributable to the sole fault or negligence of the customer. Banks shall, however, exercise appropriate care to their locker systems to protect their premises from such catastrophes.
Further banks do not insure the contents kept in lockers . But banks have the duty to take care of the lockers and that includes ensuring proper functioning of the locker system, guarding against unauthorized access to the lockers and providing appropriate safeguards against theft and robbery.
If the value of the items like jewelry is more than the liability of banks that have rented the lockers , it will be prudent for the customers to have locker insurance separately .
You can go through the detailed guidelines issued by RBI as go further in to this article .
BANK LOCKER CHARGES / RENTS :
What banks charge for hiring out their lockers ?
Banks normally provide lockers in various sizes and the rents on them differ from size to size and also on the location of the bank branch where locker are located . Normally banks collect rents annually Typical bank rental charges in some banks are as follows :
1. STATE BANK OF INDIA : The annual rent varies from Rs 1,500 + Taxes for a small locker in a rural area to Rs 12,000 + taxes for an extra large locker in an urban area . For detailed list of charges , click here
2. INDIAN OVERSEAS BANK : The annual rent varies from Rs 900 + Taxes for a small locker in a rural area to Rs 7,600 + taxes for large locker in an urban area . For detailed list of charges , click here
3. AXIS BANK : The annual rent varies from Rs 1,400 + Taxes for a small locker in a rural area to Rs 12,960 + taxes for large locker in an urban area . For detailed list of charges , click here
4. BANK OF BARODA : The annual rent varies from Rs 900 + Taxes for a small locker in a rural area to Rs 10,000 + taxes for large locker in an urban area . For detailed list of charges , click here
5. KARUR VYSYA BANK : The annual rent varies from Rs 1,2 00 + Taxes for a small locker in a rural area to Rs 20,000 + taxes for an extra large locker in an urban area . For detailed list of charges , click here
Who can rent a Bank Locker ?
Banks rent their lockers only to their KYC compliant customers who have savings bank / current account with them . Customers should be 18 years or older .
Bank lockers can be taken on rent either by a single individual or jointly by more than one individual . A bank locker can also be taken on rent by a partnership firm, a private limited company, an association, a society, a Trust and a club. Visually impaired people and those who are not literate are also allowed to rent a bank locker
Banks normally allot first come first allotted basis and they have discretion to whom to allot . They may demand a security deposit
One has to sign the bank's Locker Agreement, with the stamp duty payable.
BANK LOCKER INSURANCE :
You keep the valuables like jewelry , documents for safety provided by the banks by way of boxes kept securely in bank premises , as you do not feel secure them in your own homes . Of course , banks provide secured environment for your valuables by way of safe cabins n a guarded premises But banks premises are themselves vulnerable to fire , earthquake , flood and other natural disasters . They can also be target of thefts and robberies and banks have limited or no liability on such events , as banks have just rented the facility and they are not aware of the contents that have gone in to the the locker .
Hence it's prudent to have a separate insurance policy to cover for the valuables kept in the lockers . There are insurance companies who provide such insurance policy either as stand alone policies or part of House holder's insurance policy . Some of them are :
1. IFFCO-TOKIO INSURANCE COMPANY : Their BANK LOCKER POLICY is a stand alone insurance policy exclusively meant for valuables kept in a bank . It covers jewelry and other valuables kept in a bank locker . The policy covers loss or damage of the contents of bank locker in the event of any accident , burglary, holdup , infidelity of bank staff and any act of terrorism. It also offers an add-on cover to insure important documents kept in a bank locker.The policy offers seven options of the sum insured ranging from Rs 3 lakh to Rs 40 lakh and above . For further details , visit the website of Insurance Company
2. ORIENTAL INSURANCE COMPANY : The Householder' s Insurance policy issued by the company covers basically contents kept in your house against fire , theft etc . But Jewellery and valuables kept in the bank locker can be covered additionally on first loss basis.
For further details , visit the website of Insurance Company
In case the Houeholder's policy does not offer specific cover contents kept in a locker , one may take all risk policy which may cover for losses anywhere including losses incurred through bank lockers . You may check with the insurance company before taking such policy .
GUIDELINES TO BANKS ON HIRING OUT LOCKERS :
The Supreme court of India had instructed Reserve bank of India ( RBI ) to come out with fresh policy guidelines on various aspects of renting out lockers by the banks , while delivering a judgement in ‘Amitabha Dasgupta vs United Bank of India’, (Judgment dated February 19, 2021 in CA No. 3966 of 2010). Accordingly now RBI has come out with detailed guidelines to the banks with regard to the business of locker renting . Some of the salient features of the instructions are
1. Banks shall put in place a comprehensive revised Board approved policy and SOPs on safe deposit locker facility/safe custody article as per the revised instructions in the notification.
2. The existing customers of a bank who have made an application for locker facility and who are fully KYC compliant may be given the facilities of safe deposit lockers/ safe custody article . Non - Customers who are not having any other banking relationship with the bank may also be given the facilities of safe deposit locker / safe custody article after complying with the KYC requirements . However the due diligence shall be carried out for all the customers in whatever rights and capacities they may be hiring the locker .
3. In order to facilitate customers making informed choices, banks shall maintain a branch wise list of vacant lockers as well as a wait-list in Core Banking System (CBS) for the purpose of allotment of lockers and ensure transparency in allotment of lockers. The banks shall acknowledge the receipt of all applications for allotment of locker and provide a wait list number to the customers, if the lockers are not available for allotment.
4. At the time of allotment of the locker to a customer, the bank shall enter into an agreement with the customer to whom the locker facility is provided, on a paper duly stamped. A copy of the locker agreement in duplicate signed by both the parties shall be furnished to the locker-hirer to know his/her rights and responsibilities. Original Agreement shall be retained with the bank’s branch where the locker is situated.
5. LOCKER RENT : To ensure payment of locker rent, banks are allowed to obtain a Term Deposit, at the time of allotment, which would cover three years’ rent and the charges for breaking open the locker in case of eventuality. Banks, however, shall not insist on such Term Deposits from the existing locker holders or those who have satisfactory operative account. Demanding deposits beyond the above amount will be considered as a restrictive practice.
6. If there is any event such as merger / closure / shifting of branch warranting physical relocation of the lockers, the bank shall give public notice in two newspapers (including one local daily in vernacular language) in this regard and the customers shall be intimated at least two months in advance along with options for them to change or close the facility. In case of unplanned shifting due to natural calamities or any other such emergency situation, banks shall make efforts to intimate their customers suitably at the earliest.
7. The locker hirer and/or the persons duly authorized by him/ her only shall be permitted to operate the locker after proper verification of their identity and recording of the authorization by the officials concerned of the bank. The bank shall maintain a record of all individuals, including the locker-hirers, who have accessed the lockers and the date and time (both check-in and check-out time) on which they have opened and closed the locker and obtain their signature .
8. The banks shall offer nomination facility in case of safe deposit lockers and safe custody of articles. In case the nominee is a minor, the same procedure as prescribed for the bank accounts shall be followed by the banks. A passport size photo of the nominee attested by the customer may be obtained from the customers, at his/her option and preserved in the records.
9. Banks shall have a Board approved policy for settlement of claims.: Banks shall settle the claims in respect of deceased locker hirers and shall release contents of the locker to survivor(s) / nominee(s), as the case may be, within a period not exceeding 15 days from the date of claim .
RBI GUIDELINES ON LOCKER OPERATIONS ( CONTINUED )
10. If the sole locker hirer nominates an individual to receive the contents in the locker, in case of his death, after verification of the death certificate and satisfying the identity and genuineness of such individual approached, the banks shall give access of the locker to such nominee with liberty to remove the contents of the locker, after an inventory was taken in the prescribed manner. In case the locker was hired jointly with the instructions to operate it under joint signatures, and the locker hirer(s) nominates any other individual(s), in the event of death of any of the locker hirers, the bank shall give access of the locker and the liberty to remove the contents jointly to the survivor(s) and the nominee(s) after an inventory was taken in the prescribed manner. In case the locker was hired jointly with survivorship clause and the hirers instructed that the access of the locker should be given to "either or survivor", "anyone or survivor" or "former or survivor" or according to any other survivorship clause permissible under the provisions of the Banking Regulation Act, 1949, the banks shall follow the mandate in the event of death of one or more of the joint locker-hirers.
11. BREAKING OPEN OF THE LOCKERS : Breaking open of the locker can be undertaken under any one of the following circumstances:
(i) if the hirer loses the key and requests for breaking open the locker at her /his cost; or
(ii) if the Government enforcement agencies have approached the bank with orders from the Court or appropriate competent authority to seize lockers and requested for access to the lockers; or
(iii) if the bank is of the view that there is a need to take back the locker as the locker hirer is not co-operating or not complying with the terms and conditions of the agreement.
12. All charges for opening the locker, changing the lock and replacing the lost key may be recovered from the hirer. The charges applicable for replacement of lost keys / issue of new password shall be communicated to the locker hirer.
13. Banks shall have the discretion to break open any locker following due procedure if the rent has not been paid by the customer for three years in a row. The bank shall ensure to notify the existing locker-hirer prior to any changes in the allotment and give him/her reasonable opportunity to withdraw the articles deposited by him/her. A clause may be incorporated in the locker agreement to this effect.
To read the RBI Notification in this regard , CLICK HERE
PRECAUTIONS WHILE HIRING / OPERATING BANK LOCKERS :
1. While choosing a bank for locker operations , try to hire a bank locker from your nearest bank branch . It frees greatly from hassles
of transporting of your valuables from residence to bank and back .
2. . Remember to obtain a copy of lock agreement while hiring a bank locker . Check for the timings during which you will be allowed to operate the locker .
3. It's better to make the locker operations either or survivor with your spouse to avoid hassles in case of unfortunate demise any one of you .
4. Carry your valuables to the bank in a closed / opaque bag so that third party may not know what you are carrying to the locker . There can be miscreants who are having vigil on the bank customers .
5. The lockers will have two keys . One with you and the other key with the bank . Bank employee will accompany you to the locker room with his key and he operates the first key . Before you open the locker with the other key , wait till bank employee leaves the locker room .
6. Before leaving the locker room , confirm that locker is properly locked .
7. If possible , hire two lockers -one for the valuables and the second for the documents .
8. Keep records of what has gone in to the locker . In case of insurance claim , you may need .
9. BANKS WILL HAVE NO LIABILITY / LIMITED LIABILITY IN CASE OF LOSS OF ITEMS KEPT IN THE LOCKERS DUE TO NATURAL CALAMITIES OR THEFT & ROBBERIES . HENCE TAKE INSRANCE SEPARATELY FOR THE VALUE OF ITEMS KEPT IN THE LOCKER