How safe are your Bank Lockers?

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There are some valuables that we think are the safest in a bank locker. Most people have this opinion that your valuables are 100% safe when kept in a bank locker. 

But before following the so called trend, have you independently assessed, how safe are the bank lockers?

I don’t think so.

Well, that’s because we just trust the bank and assume that it will be safe.

However, here are some points that you should know while considering a bank safety deposit locker.

1. The bank is NOT liable for the loss of valuables in your locker.

Yes, you got it right. In case, there is a mishap such as robbery or fire etc. due to which you lose the valuables kept in your locker, then the bank is not liable to compensate you for the amount of loss, provided it had taken adequate safety measures to safeguard the lockers.

There are various reasons for it.

First of all, the bank does not check what you keep in your locker. Therefore, it cannot ascertain the actual amount of loss. And since, it cannot ascertain the actual amount of loss, they cannot compensate you.

Secondly, if the banks have maintained adequate security then the bank will not be liable for any loss since they have performed their duties.

Bank-Locker

2. The Banks can open your locker without your permission

The normal practice for operating a bank locker is that you given a key for your locker and another key remains with the bank. So when you have to open your locker than banker’s key and your key have to be used simultaneously to unlock the safety deposit lock.

But in case you do not operate your safety deposit locker for a long duration or if you fail to pay the rent then the bank has the right to break open the locker without your permission. It may send you notice to open pay the rent or operate your locker from time to time. In case of failure to respond to the notice, it may have to do so.

You may think it is unfair that the bank has the right to break open your locker, but at times things like explosives or illegal substances have been found in the locker, especially the inoperational ones. Thus, the banks have the right to break it open and rent it out to someone else.

The criteria to operate the locker depends upon the profile of the account holder. Some accounts are classified as high risk and some may be low or medium. Depending upon the risk type, the bank may impose conditions. For instance, a high risk customer may have to open his safety locker at least once in a year.

3. You can claim for a loss in extreme eventuality but not 100% compensation

The banks usually get an insurance of the lockers for extreme events that are beyond the control of the bank. Therefore, in case of any mis-happening although the bank is not liable to compensate you but you can claim some amount if you can provide the proof of the valuables that you are claiming were in the locker.

You should keep a list of the things kept in the locker, be it documents or jewellery or cash or any other valuable for that matter. But even in that case you cannot claim 100% compensation because the value of the documents can’t be quantified.

Thus you can claim a notional amount as a compensation for the loss but you cannot claim 100% of the loss.

What if there is a Loss due to Bank’s fault?

If the loss was due to the fault of the bank – then you can claim the loss. The bank is responsible to maintain and safeguard the lockers properly. So, if the loss is due to any of the shortcomings from the bank side, then you can claim the complete loss.

There is a famous case affirming the above statement. In that case, there was a man who had kept some currency notes in the lockers. Due to the poor locker conditions, the termites ate away the currency notes!

Shocking, right?

Yeah, well in this case the customer was fully compensated for the same, as it was due to the negligence of the bank.

Thus, if the banks have taken proper safety measures and still there is a loss, the bank will not be liable for compensation but you can still claim a notional amount, which is if you can prove the worth of the valuables kept in the locker. But if the loss arises due to a negligence from the bank, then you can claim the entire loss. However, here also you will have to prove the amount of valuables kept in the locker.

As much as all this information is true, it doesn’t mean that you should get discouraged from getting a bank locker. If you take the safety measures stated below then you can ensure that your locker is safe.

  • Always open your locker after the bank employee who accompanies you to the vault has left the locker area. Ensure that you are alone..
  • Make sure that the bank is using top-notch security measures to safeguard the lockers such as alarm system, iron-gated rooms, electronic surveillance via CCTV, etc.
  • Make frequent visits to your locker to ensure that all your valuables are safe.
  • Ensure the locker is properly locked before you leave the vault.
  • Minimise the risk by getting more than one locker to keep your documents and valuables separately.
  • Always choose a bank branch that you trust which is near your place, so that you can visit them often.
  • Laminate the documents kept in the locker, for a better shelf life.
  • Always keep a record of all the belongings kept in the locker, along with its worth.
  • Keep a copy of the hire-purchase agreement with the bank of the locker so that the bank cannot ask for a higher rent in future.

I hope this article helps you take better and informed decisions.

Karan is CA by Qualification with the rare distinction of being awarded All India Rank 22. He is also the founder of this website and is an expert in helping people save Taxes legally. He can be reached by booking an appointment for Tax Advisory Service.