Bank Lockers (Safe Deposit Box) - a Complete Guide

This document covers

1. Cost of the Locker
2. Usage of Locker
3. Important points to be taken care before opening a safe deposit locker in bank.
4. RBI rules to be effective from 01st Jan 2023

1. Cost of the Locker

1. Bank lockers (Safe deposit lockers) is a rented locker and rent needs to be paid for using the locker to store valuables.
2. Rent of the locker depends on various factors like size of the locker and the branch of the bank and the relationship with the Bank. Rent will vary between the public sector banks and private sector banks.
3. The rent of the locker should be paid in full before the start of financial year.

2. Usage of Locker

1. The individuals (locker hirer or the persons duly authorized) shall be permitted to operate the locker only after proper identification of identity.
2. To open the locker, 2 keys are needed i.e., 1 with the customer and another with the bank custodian.
3. Generally, bank lockers can be operated during the working hours of the bank. Recently some banks are coming with 24/7 locker facility.

3. Important points to be taken care before opening a safe deposit locker in bank.

There are certain points which needs to be kept in mind while opening a safe deposit locker in banks

1. Selection of Bank : There are public sector banks and private sector banks which are offering the safe deposit locker facilities in India. Now a days , branches of the banks are operating at several locations. So, one need to select the bank depending on the location, waiting time etc
2. Right size of the locker : Lockers will come in the form of small, medium, large and extra-large. Choose the right size of the locker depending on the requirement.
3. Cost of the Locker : Locker rent depends on the size and location of the locker. Some lockers with additional facilities like 24/7 facility will have high cost. Check the budget and choose the locker type depending on requirement.
4. Security of the locker : The locker is a safe place to store the valuables. Hence the security is very important in choosing the locker. Check whether the lockers are protected with CCTV, guarded by security person and strong entry and exit points
5. Opening a Savings Account : Even though it is not mandatory to have a savings account, but most of the banks recommend opening a savings account before opening a locker as it helps them in recovering the locker rent and giving priority to customers having bank account with their bank.
6. Nomination : The bank locker allows you to add a nominee. Nominee should be appointed separately for savings account and locker, In case of an unfortunate event, the nominee can access the lockers.
7. Frequency of usage : The locker must be operated at least once a year. If the locker is not opened once in a year, the banks are permitted to break them as in locker agreement. However, banks have certain numbers of visits prescribed every year. If we operate the locker for more than prescribed visits, they will charge additional fee.
8. Liability of Banks : Banks are not liable in case of loss of valuables in the locker due to theft or fire etc. Banks are responsible only in cases if they have not taken adequate safety measures. However as per recent guidelines, banks needs are liable upto 100 times of the locker rent.
9. Keeping Cash in Lockers : There is no restriction on keeping cash in bank lockers but it might attract scrutiny from income tax department. Adequate measures must be taken to avoid the unnecessary notices from Income tax department
10. Insurance : Banks are prohibited from selling insurance to their locker customers. Banks should exercise adequate care to protect the lockers.
11. Regular payments of rent : Locker rents needs to be paid regularly. If rent is not paid for certain period, the banks can open the lockers to sell to recover the rent and fees.

4. RBI rules to be effective from 01st Jan 2023

1. Banks are allowed to demand a term deposit towards rent for 3 years. But the bank should not insist for term deposit if the customers are having sufficient savings bank balance
2. CCTV camera’s needs to be installed at entry and exit points and the banks should preserve the recording for minimum 180 days
3. If any valuables are lost due to fire or theft that were kept in the Bank Lockers, the customer can get 100 times of the annual locker rent they have paid
4. Customers are now required to renew their locker agreements
5. The Reserve Bank of India (RBI) has granted banks until December 31, 2023, to renew the bank locker agreement with their clients.
6. In the event of severe rains, floods, earthquakes, terrorist activity, or violence from antisocial elements, or if a customer neglects to maintain the items in the locker, banks are not liable for the protection of the contents.