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Are bank lockers safe? It is a difficult question to answer.
Amid the recent bank locker heist at a Bank of Baroda branch in Navi Mumbai, bankers and experts are suggesting upgradation of security and alarm systems, fresh guidelines and safety procedures to battle the new and intelligent techniques of robbers and criminals.
Straight out of a movie, Mumbai witnessed one of its most shocking heists where robbers escaped with valuables and jewellery worth over Rs 1 crore from 30 safety lockers of a Bank of Baroda branch, by digging a 25-feet tunnel from the adjacent shop.
Bank of Baroda CEO and Managing Director PS Jayakumar said, “It does raise questions and issues, not so much about us but the sophistication in which it is taking place. Therefore, we have to rework the kind of mechanics we have, the kind of alarm systems and upgrade all of them. The investigation is on now. But banks are insured when it comes to lockers and it is not a financial loss to the bank.”
This is not the first time that bank lockers have been attacked by digging a tunnel.
In 2014, thieves dug up a 125-foot-long tunnel into a Punjab National Bank branch in Sonepat district in Haryana breaking into 77 lockers decamping with cash, jewellery and other valuables. In June this year, a PNB branch was attacked by burglars who drilled a two-foot hole stealing valuables out of 30 lockers.
A senior State Bank of India official said, “These are unfortunate and isolated cases. Bank safes are usually well secured, have the highest security standards and the walls and even the floorings are RCC (reinforced cement concrete) which are difficult to break in. But ultimately technology is changing and the cutters that these thieves use have also become sharper and quicker to use. Hence, banks must follow utmost security and have the corridor guarded.
AC Mahajan, Chairman, Banking Codes and Standards Board of India (BCSBI) said, "It's a very unfortunate incident that happened. The RBI asks banks to ensure certain security like the walls, security guard, safety locks for the vaults; lockers should be of an approved manufacturer and of a certain quality, etc. Maybe now there need to be new guidelines for stronger and new type of flooring, too.”
Further, he said that banks are not responsible for the things kept inside the lockers. It is mentioned in the contract while assigning a locker. The facility is beyond the financial services that banks offer to customers.
According to him, the relationship between the bank and the customer in case of a locker is akin to that between a lessor (banker) and a lessee (customer) of a house, where the former is not responsible to take care of the things kept inside the house.
An email sent to the Reserve Bank of India (RBI) did not receive any response.
RBI guidelines
In 2007, RBI came out with final guidelines on safe deposit lockers that said that banks are not responsible for the contents of the lockers they rent.
“It is clarified that the relationship between the bank and the locker hirer is in the nature of a 'bailor and bailee' and not 'landlord and tenant' though the bank has no knowledge of the contents of the locker and the bank is required to exercise due care and necessary precaution for the protection of the lockers provided to the customer.”
According to Section 152 of the Indian Contract Act, a bank is not responsible for any loss or damage to the contents of a locker.
Respite for customers
Hence, the recent heist again raises concerns on the safety and trust factors of banks. Most importantly, what reprieve do customers have?
None. Because banks are technically not responsible for your valuables inside the lockers.
Banks are only responsible to meet the security measures and procedures to ensure safety of the lockers from outside. The valuables inside are also not insured by the bank.
An RTI query by a lawyer earlier has revealed something really shocking for many Indians: Banks will not compensate for loss of your valuables kept in their lockers. That’s because "the relationship banks have with customers with regard to lockers is that of lessee (tenant) and lessor (landlord)". In such a relationship, the lessee is responsible for his or her valuables kept in the locker which is owned by the bank, a Firstpost report said.
Mahajan says, the only respite for customers can be to insure their valuables and register a complaint with the police if valuables are stolen. Only if proven that the locker had those insured valuables, can the customers claim the insurance.
With banks not taking responsibility for any theft of the contents in your bank lockers, apart from insuring the jewellery and other valuables, one can even buy a householder’s policy, in which if you declare the valuable contents of the house; they are insured against any kind of loss or damage like theft, loss, fire, accidental damage and so on.