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Bank locker continues to be safer option

In response to a recent query raised by Competition Commission of India (CCI) through RTI, the RBI and 19 PSU Banks expressed that no “compensation” for theft or burglary of valuables in their safe deposit lockers can be awarded, as the locker hiring agreement “absolves” them of all liability.  The RBI policy states: “The bank will in no way be liable….., and in case of unforeseen events, action will be initiated as per law.”

For long, bank vaults have been the primary option to safeguard valuables from fire and theft. Prized possessions such as jewellery, property documents placed in the lockers are usually guarded by elaborate security.  Over a period, people also kept family mementoes, photographs, even odd materials, like false-teeth and human ashes in the lockers.

In case of banker’s negligence…

The fire break-out in the state-owned Punjab National Bank (2012) raised many “safety” questions. In 2013, robbers broke into the strong room of Punjab & Sind Bank, Jalandhar branch and emptied nearly 40 lockers, revealing the poor security infrastructure. Though the bank promised “safe” deposit locker facility to its customers and charged for the service, sadly there were no cameras in the strong room, not even a security guard, which attracted the crime.

In the PNB, Bombay vs. K.V. Shetty (FA no.7 of 1991), the person found the contents (jewellery) of his locker to be missing and received a compensation of Rs.126,017/- along with interest.  Though the bank insisted that it was not responsible for the loss as per the agreement signed, the National Consumer Disputes Redressal Commission (NCDRC) dismissed the bank’s argument.

In another case – Bank of India vs. Smt. Kanak Choudhary (RP no.889 of 2000)- the customer pleaded that termites had destroyed the currency notes and important papers kept in his locker. The bank “was bound to ensure that the respondent’s locker remained safe in all respects”, and recompense was awarded to the aggrieved party.

Terms and conditions limiting the liability of the bank notwithstanding, it did not prevent the consumers from getting compensation. One does not know how they did the valuation, but it is ideal for clients to make a detailed list of the contents of the locker, get them imaged and valued, if possible.

But then, you don’t show the proof of your belongings in the locker through an invoice, while it is even more complicated to prove that the invoiced items were inside the locker, and nobody keeps valuables in a locker in the presence of a witness. If the gold ornaments are inherited, then one may not even have bills to prove their purchase value, as jewellery is valuable for both monetary and emotional reasons.

Can the contents be insured?

As there is no proven way of estimating the value of the locker content, there is no insurable interest.  However, to tide over your sleepless nights over the safety of your valuables, some standalone jewellery insurance products are available in the market.

A private Bank is offering one such cover (with several terms and conditions attached to it). But it makes better sense if you consider availing protection under home insurance policy from private insurance companies, which covers accidental loss, damage, burglary and theft of jewellery kept in some specified bank lockers, jewellery stored at home.

Bank lockers less expensive

Bank lockers are relatively less expensive, the procedure simpler, mandating less paper work.  Also, lockers can be used for securing any number of valuables without incurring extra fee (it only goes with the locker size), which is not the case with insurance.

The customer, before hiring a locker, must satisfy himself that bank has all the requisite safety measures such as alarm system, CCTV surveillance are in place, and make wise decisions about (a) what items are kept in the locker, (b) who has access to the locker, and (c) what happens to the contents if something happens to the locker-holder…

With advanced technology and safety measures, “missing” of valuables can be rare aberrations, and bank lockers are still safer to park your valuables.

(The views expressed by the author in the article are his/her own.)

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