Avoid inoperative bank locker status with rent payments, periodic visits

The Uttarakhand High Court recently asked a public-sector bank to clarify the rules that permitted officials to break open a customer’s locker without consent. According to a media report, the case arose following a complaint by an 86-year-old whose jewellery was allegedly removed in her absence. Her son discovered the breach during a branch visit. The incident underscores the need for locker holders to stay vigilant. 

When banks may break open lockers  Banks must follow standard operating procedures when accessing lockers in specific scenarios. “Prior information needs to be sent to the customer whose locker needs to be accessed,” says Adhil Shetty, chief executive officer (CEO), Bankbazaar.com. A bank may access the locker if a customer loses the key. “The bank can initiate the procedure in the presence of the locker holder and an authorised official,” says Shetty. 

Banks may also break open the locker under directives from law enforcement agencies. The locker holder is informed through written communication regarding the request for seizure or attachment. 

A locker may also be broken open if rent is unpaid for three consecutive years. If a locker remains inoperative for seven years and the holder is unreachable, the contents may be transferred to a nominee or legal heir, or disposed of transparently, even if rent has been paid. 

Compensation in case of loss  If loss or damage is due to the bank’s negligence, the bank could be held responsible. “Negligence could include instances such as failure to maintain the security of the locker, unauthorised access due to staff negligence, or failure to take necessary precautions during natural calamities,” says Vijay Arisetty, co-founder, Aurm. He adds that while the RBI has recommended a board-approved compensation policy, it is not mandatory. 

Judicial scrutiny of banks’ responsibilities in such matters has increased. “Courts in India have occasionally ruled that banks have an implicit duty to protect lockers and they cannot shirk responsibility in case of theft or damage due to negligence,” says Arisetty. 

According to the bank locker policy, the bank does not know what is kept in a locker. “Banks, therefore, get insurance done according to the Reserve Bank of India (RBI) guidelines, which is a maximum of 100 times the locker rent,” says Amarnath Saxena, chief technical officer-commercial, Bajaj Allianz General Insurance. 

Stay vigilant 

Sign the RBI-mandated locker agreement. “It outlines your rig­hts and the bank’s responsibilities,” says Shetty. Maintain a det­a­iled inventory of stored items, preferably with photographs. Pay your locker rent regularly to avoid the risk of the locker being broken open after a prolonged non-payment. Visit your locker periodically to prevent it from being marked as inoperative.

  Buy insurance 

To ensure further safety of locker contents, purchase insurance. Some home insurance policies offer add-ons for valuables stored in lockers. “Most standard home insurance policies limit the maximum amount they cover for valuables stored in a bank locker,” says Saxena. 

For dedicated locker coverage, consider a policy like IFFCO-Tokio General Insur­ance’s Bank Locker Protector Policy. It covers jewellery and other valuables stored in bank lockers. “It covers burglary, hold-up, accidental damage, terrorism, and even staff misconduct, and compensates for loss or damage to locker contents up to the specified sum insured,” says Niharika Singh, executive director of marketing, IFFCO-Tokio General Insurance. The annual premium for a ₹20 lakh sum insured is about ₹1,500. 

What locker protector policy does not cover

  Loss of cash or currency

  Items not stored in a secure bank locker, or if maintenance is poor

  Damage caused by mechanical or electrical failure; computer issues; natural ageing, rust, insects, mould

  Extreme temperature, humidity, or light, unless caused by storm or fire

  Damage due to war, civil unrest, rebellion, or military actions, or from nuclear radiation

  Government confiscation or seizure

  Intentional damage or gross negligence by the policyholder or their family

  Source: Iffco Tokio General Insurance