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Monday, December 5, 2016

How safe is a Safe ? ~ what do you have in your bank locker ?? - Insure and be secure !!

All of us are keen to earn more ! ~ most  likely you have a ‘safe deposit locker’ with a bank … depending on the valuables that you have – as one’s riches increase, one is forced to  chose renting  a bigger sized one (may be some require a room and not a box !) ~ and ever wondered : how safe is a safe ?

                      A safe deposit box, (not a safety deposit box) -  is an individually secured container, usually held within a larger safe or bank vault. Safe deposit boxes are generally located in banks, post offices or other institutions. Safe deposit boxes are used to store valuable possessions,  (Gold, silver, diamond ornaments ….) precious metals, currency, marketable securities, important documents such as wills, property deeds, - things that  need protection from theft, fire, flood, tampering, or other perils.

Typically, upon applying, Bank allots a locker and charges rent for the same.  The box which is either affixed to a wall or is a row of such boxes made of strong iron – can be opened only with combination keys. The Official first opens with a key – and then – in the two keyholes, one key held by the person and the other in the possession of official are used to open ….the official would leave the room – ensuring total privacy – the box can be locked by the owner – but reopening  can be done only by combined use of both the keys.  You may find slightly differential arrangement in Star hotels, resorts and cruise ships …. (the locker inside the room can be opened by a combination of numbers which the guest can select)

Though the banks collect ‘rent’ – ‘safe deposit charges’ (earlier they used to insist on Fixed deposits being kept) – RBI circular clarifies that the relationship between the bank and the locker hirer is in the nature of a 'bailor and bailee' and not 'landlord and tenant'.  The bank at all point of time, 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.  More importantly, the bank (or any other Company) is not liable for the contents kept in the Safe [some Insurers do cover material in the lockers upon proper declaration]

A fire in a PSU Bank exposed the vulnerability as those who had kept their valuables learnt from the Bank that they would not pay anything as they had taken sufficient care. Then  Chennai rains taught  the fact that most bank lockers in the city are either located on the ground floor or the basement.   After the  torrential rains, many parts of the city were under water for more than a couple of days – in some places there was inundation and water seepage into the lockers as well. Though the lockers are strong and fire-proof,  they are not water-proof … the water brought along filth and slush ~ damaging the contents, especially the documents kept inside the cupboards.  Even the Gold, Silver and other bullion kept inside would have required some  cleaning !

Now read this news item of Indian Express & Times of India -  A consumer court slapped a fine of Rs 1 lakh on a bank after a customer’s property deed documents stored in the bank’s locker were damaged by termites.

The complainants, a couple  from Anna Nagar have been joint account-holders of a locker in Chennai Bank since July 2000. A Memorandum of Lease Agreement for the locker was executed for this. In 2013, they kept two original title deeds, of their landed properties. After a few years, they in trying for a loan for construction, applied for a loan, and went to the bank for retrieving the documents from their locker – only to find  documents inside were eaten up by white ants. 

When the couple complained to the bank, they were assured that appropriate action would be taken. However, a month later, an employee at the bank rang them up, asking them to remove their documents from the locker. Defending its side, the bank claimed it had no knowledge of the damage to the documents, adding  that the lockers are made of steel and painted with anti-corrosives, making it impossible for ants to enter.

The District Consumer Redressal Forum, Chennai (North), presided over by K Jayabalan, found that the bank had initially accepted responsibility, but failed to respond.  The bank later denied responsibility.  Forum pointed out that there was no record of pest maintenance measures taken by the bank. The consumer body directed the bank to pay Rs 1 lakh as compensation for negligence, Rs 10,000 towards charges for obtaining certified copy of the original deed and Rs 5,000 towards litigation expenses.

Some could keep hard currency [some could hoard wads of currency and finding it difficult after demonetisation also] – another report in Indian Express mentions of a woman in Surat having trouble after termites feasting on her Rs 1 lakh kept in a locker.

Rushing to your locker today itself ! – there is no way, of an official documentation on what is kept in your locker – there are ways of insuring all your property against the risks of ‘Fire & allied perils; Burglary and the like’ – safely kept at home and at locker too … do contact your friendly Insurer.

With regards – S. Sampathkumar

5th Dec 2016.

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