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What is safe deposit locker and how to operate?
Rows of keys with numbered red tags in safety deposit boxes at a sporting venue or travel terminal for the safekeeping of personal valuables

What is safe deposit locker and how to operate?

Safe deposit lockers are specially designed lockers which are generally kept at specially built strong rooms for keeping the valuable of hirer. In India safe deposit lockers are available in most of the Bank branches. These lockers of different sizes like small, medium, large, extra-large are purchased from reputed manufacturers to suit the needs of the customers.

Who can hire a safe deposit locker?

Locker facility is a value added service provided by banks to their customers. The locker facility can be availed by individuals either singly or jointly, partnership firms, Limited companies, Clubs, associations, trusts, societies etc.

How to operate a safe deposit locker?

Whenever you wish to operate the locker hired by you, you will need to sign with date and time on a register maintained by the bank to get access to the Safe Deposit locker. The officer in charge of SDL will take you to the locker room. With the bank’s master Key and your key, open your Safe Deposit Box slot. Once the locker slot is opened the officer will leave the place and you can remove or add items to the box and close the locker slot with your key.

What is the relation between the bank and locker hirer?

It is clarified by RBI 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.

Is it compulsory to keep fixed deposits to take the locker facility?

No. RBI vide circular DBOD. No.GC.BC.27/C.408C (L) – 84 dated March 27, 1984, to the public sector banks, advised that they should not insist fixed deposit as a prerequisite for allotment of lockers. Banks were, however, permitted to either seek a deposit (but not as a condition for allotment), the interest on which may cover the annual rent or alternatively advance locker rent could be collected up to three years. However Banks are prohibited from restrictive practices of demanding placement of fixed deposit or any other deposit beyond what is prescribed to cover the rent.

What will be the locker charge?

The locker rent charged by banks may not be uniform in all the banks. The rents vary depending upon size of the locker and location of the locker leased. For example, rent for a locker in a rural branch of the bank is low, in semi-urban area rent for the same size locker rent will be higher, in urban area rent will be higher than the semi-urban area and in metro area banks charge highest rate of rent for lockers hired. Rent for Safe Deposit Lockers is charged annually and rent is payable in advance at least for one year with an option to pay rent for 3 years. If the locker-hirer is having a fixed deposit with the bank, it can be earmarked for an amount so that the interest covers the locker rental as an alternative to collecting the annual locker rental in advance. If the locker hirer opted for annual payment of rent and default in payment, he/she should not be allowed to operate locker till the arrear rent is cleared. In the cases of overdue rent payable, the bank will charge interest on rent overdue. Banks have the right to break open the lockers in case of default of rent. In such cases banks will have explicit policies to break open the lockers and have to give due notice to the hirer/s at the last available address with them.

What are the KYC norms for safe deposit lockers?

Banks are required to periodically update their locker customers’ KYC details under Know Your Customer (KYC) Norms /Anti-Money Laundering (AML) Standards/ Combating of Financing of Terrorism (CFT)/Obligation of banks under Prevention of Money Laundering Act (PMLA), 2002. Periodic updating of KYC for locker hirers is as prescribed to customers of medium risk or risk category attributable to their bank account whichever is higher. In case locker remained non-operative for more than one year and three years respectively for high risk category and medium risk category, the banks should contact the hirer and ask them to surrender the locker allotted to them in spite of rent paid by them regularly. If the lockers are not surrendered even after sufficient notice, banks need to contact and take the help of police for breaking open the locker.

Related articles:

  1. What is the procedure to be followed on death of a locker holder?
  2. How a bank returns safe custody articles to nominee/legal heir?


(2) Comments

  1. Sunil Joshi

    Sir, first congrats on developing such a wonderful site with all around information on Banking - Very very useful at every stage of Banking - Sir, we wanted to take locker in name of one trust having required KYC and also having operative SB account in that Branch - but for that locker facility we have been asked to get certificate from Charity Commissioner - Pl guide the act of demanding the certificate from Charity commissioner for hiring locker in Trust's name is valid or not ??

    1. Surendra NaikSurendra Naik - Post author

      As per RBI guidance Banks to carry out KYC checking after ascertaining about risk associated with the hirer. This should be done for new as well as old customers. There is no mention in the RBI guidance about getting certificate from Charity commissioner for safe deposit locker. As per my knowledge, only for opening bank account of a charitable trust banks call for charity commissioner letter. You may approach another bank for the facility and shift your account where you easily get locker facility.

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