Key to locker operation

Approach any bank to open a safe deposit locker and you will be invariably told it comes bundled with other services, a term deposit at the very least. But did you know that banks cannot compel accountholders to open a fixed deposit or any other account while allotting a locker? According to the Office of the Banking Ombudsman, they can, at the most, charge a three-year rental in advance.

The rationale behind the move, according to the Reserve Bank of India (RBI), is risk management. By granting lockers only to existing customers or by insisting on an upfront payment, banks can cover eventualities like late payment of rent or having to break open the locker. Unfortunately, if you don’t have an existing relationship with the bank, you can’t sue it for demanding a fixed deposit covering up to three years’ rent. Here are answers to some similar questions regarding lockers.

Can the bank open my locker in my absence?
Banks can consider opening the locker if it is not operated for a prolonged period—more than three years in the case of a customer in the medium-risk category or one year for those in the high-risk category, as per the know-yourcustomer guidelines. This clause holds true even if the locker owner has been paying his rent regularly and on time, provided the locker agreement clearly mentions this fact. However, the bank has to first ask the customer to give a written explanation for not operating the locker, followed by a notice cancelling the allotment and announcing the opening of the locker.

Will the bank compensate me if my locker’s contents are stolen?
Though most banks’ locker agreements state that the bank has no liability with respect to a locker’s contents, there are enough cases where the courts have backed customers. By establishing that the relationship between the bank and the depositor is not that of landlord and tenant, these landmark judgements allow you to sue your bank for equivalent compensation in case of burglary or if the locker’s contents are damaged by termites, water seepage and the like, barring natural disasters.

Can a bank increase the locker rental amount mid-term?
The fine print in the terms and conditions states that the bank reserves the right to modify its fee structure. But it cannot do this midterm. According to the RBI, recovering rent at a higher rate without the customer’s consent or knowledge is illegal. Merely posting the new rates on the bank Website or branch notice board won’t be considered adequate intimation. If your bank does this, you can sue it for negligence of service under the Consumer Protection Act, 1986, Section 2(1)(c)(iii), 14(1)(d).

Source : Media