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Five facts to know while renting a locker
Bank
safe deposit lockers are a good option for safeguarding your valuables and
documents ; the things to keep in mind before acquiring one are
1 How does it work?
Just as you trust a bank with your money in the savings accounts or
fixed deposits, safe deposit lockers offer the best option to safeguard
your valuables, including jewellery, cash and important documents. Banks
must allot lockers on a first come, first serve basis. If none are
available, the bank branch needs to maintain a waiting list and provide the
applicant with a waitlist number. It must also inform the customer when it
is available. Each locker has two sets of keys—one for the customer, the
other with the bank—and it can be opened only if both the keys are used. It
is better to own a locker jointly and name one or more nominees. This
ensures hassle-free transfer of contents in the event of the death of
either or both account holders. Most importantly, read the guidelines on
lockers thoroughly.
2 How much does it cost?
Lockers come in different sizes
and the annual rent varies accordingly. The State Bank of India charges
1,019 per year for a small locker, 2,547 for medium, 3,056 for large and
5,093 for extra large lockers. In private banks, the charges are steeper.
Citibank charges 2,500 for the smallest locker and it goes up to 40,000 for
the best facility on offer. There is a one-time registration fee as well.
The SBI charges 509, but it varies across banks. Banks also charge rent
overdue charges of 10-50% of the annual rent. There are rules on the number
of visits in a year as well. For example, the SBI allows 12 free visits a
year and charges 51 for extra visits. You must, however, visit your locker
from time to time. Banks are also allowed to recover charges to break open
a locker and a minimum service charge of 500 over and above the actual
expense, if you lose your locker keys.
3 Is it safe? According to the RBI, banks are, in no way, responsible
or liable for the contents kept in the locker, even in the case of theft,
burglary or similar unforeseen events. However, it still remains the safest
bet as the RBI also mandates banks to have the best-in-class security
arrangements to safeguard customers’ interests. The quality of lockers is
also the best in the market and undergoes rigorous safety tests and are
fire-resistant. In spite of all precautions, there have been reported
break-ins or termite attacks in banks, but the incidents are few and far between.
4 Do you need to have an
account?
The RBI says banks cannot deny
the locker facility to those who are not customers. However, banks can ask
for a caution deposit of up to three years of a locker’s rent, plus
charges, to break open a locker in emergencies, along with the relevant
service charge. For example, if you pay an annual rent of 1,019, banks can
ask you to open an FD for 4,066 ( 1,019 x 3 + 509 service charge + 500
breaking charges). In reality, though, banks make it mandatory to open a savings
bank account on the pretext of getting your KYC done. Some even force you
to open a FD, or miss-sell high-cost Ulips or insurance plans. This is in
violation of RBI norms and you can lodge a complaint with the apex bank.
5 How much compensation can you
get? Banks are not responsible for
the contents of the locker. In case of natural calamities, including an
earthquake or flood, and even in the case of a terrorist attack, where your
locker contents are destroyed or lost, banks can easily wash their hands
off the compensation. Even in case of a break-in or a termite attack, banks
can argue that since they have no knowledge of what you had stored in the
locker, they cannot compensate you. However, they can be held responsible
for not providing adequate security or lack of basic maintenance. So, you
could receive some compensation if you move the court.
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