Bank locker facility is availed by customers for safekeeping of valuables such as jewellery, important document etc. If you have already rented one or want to there are certain things you must keep in mind.
Opening the account
Usually, the demand for lockers is high and therefore customers have to apply to avail the facility. Customers should make sure that the bank branch where they wish to open the locker is near their area of residence. This is important because locker holders are expected to operate the account at least once a year.
Based on availability, the bank and customer enter into a locker rental agreement that stipulates terms and conditions, liabilities and responsibilities of both parties.
Maintenance
While the contents of your bank locker will invariably remain safe from unwanted outside influence, there are certain conditions when bank authorities may interfere.
The Reserve Bank of India (RBI) mandates banks to open the vaults in cases where the locker remains dormant for a period of three years depending on the risk profile of the account holder.
The subscription of your vault may be cancelled in case no activity is done in it for at least a year. But this is subject to the risk classification in which your account has been profiled by the bank.
Banks put their customers in categories such as high risk, low risk or medium risk based on a number of factors. These parameters are income status, social profile, nature of the business activity, location of the customer among others.
Banks do a thorough know-your-customer (KYC) profiling of potential customers as the latter are not obliged to inform the lender what they intend to store in the vault.
Customers who are in the low-risk category may be allowed more than a year of inactivity before the lender decides to take action.
Medium-risk customers may be sent a notice only if their account remains inactive for more than three years, as per RBI regulations. Before taking action against a dormant vault, banks are required to send a notice to the customer reminding them to operate the account.
Rent & maintenance
The rent of the vault is decided based on factors such as bank branch, size or location of the locker. Customers should also maintain an appropriate balance in their bank accounts which can take care of the annual rent of the vault. It is normal for banks to ask for collateral in the form of deposits that cover rent of upto three years.
Nomination and joint holders
A locker can be jointly held by more than persons. On the death of any of the holders, the nominee and other holders get access to the contents of the locker after submitting the requisite documents. It is necessary to register a nominee or else the legal heir of the account holder will get access in case of death of account holders.
Insurance of bank locker
Most general insurance companies offer bank locker insurance. For example, Tata AIG insures jewellery for its high net worth customers under a packaged policy in which jewellery kept in locker, home or worn by some is insured. IFFCO Tokio General Insurance also has a standalone policy for bank lockers which provides protection against theft and other perils. It covers items kept in a bank locker such as jewellery and other valuables. It provides protection againts fire, earthquake, burglary, holdup, infidelity of bank employee, act of god perils and any act of terrorism.
