Patience may fetch you the coveted metal box

Patience may fetch you the coveted metal box

If you want a safe place to keep your gold and silver jewellery, and important documents, there is no better place than a bank’s safe deposit locker. But if you think opening a safe deposit locker was just as simple as walking into the bank with relevant documents, filling a form, paying a fee—think again. It’s not as easy as it appears. There are a few hurdles you need to cross before reaching the safe ground.

Limited locker facility

Though most banks in India, especially the public sector bank, offer locker facility, they may not offer the facility at all their branches. There are selected branches where the locker facility is available. For instance, as on 31 March, out of the total 1,725 branches of HDFC Bank Ltd, only 1,216 had locker facility. One way to save all the legwork is to check the banks website. Usually, the list of branches where the locker facility is available is mentioned there.

Also See Locker Facts (Graphic)

Long wait

The second hurdle you need to cross is the availability of the lockers. Even if you go to a branch that has a locker facility, chances are all the lockers are already hired. In such a case, you will be placed on a wait list by the bank. The wait for locker can be anything from a few days to months. C.S Jain, head—personal banking group, IDBI Bank Ltd, says, “Availability of lockers depends from centre to centre. At some centres it’s quicker, at others it’s a longer wait." It is commonly assumed that the older public sector banks may have locker facility but they have very small number of lockers actually available—reason being, most lockers have already been occupied for years. Jain further adds, “There is no limit to the number of years a person can rent a locker. There have been people who have rented lockers lifelong." As per the Reserve Bank of India, or RBI, guideline, branches are supposed to maintain a wait list for the purpose of allotment of lockers and ensure transparency in allotment of lockers. If rumours are to be believed, we have heard of instances where bank employees have asked customers to pay a small fee (read bribe) to decrease their wait period. In fact RBI insists that all applications should be acknowledged and given a wait list number.

Size matters

Even if the locker is available, it’s possible that it may not be of the size as per your requirement. It’s easier to get a small and medium size locker compared with a large locker. Puneet Kapoor, head—product and process, retail liabilities and branch banking, Kotak Mahindra Bank Ltd, says, “As of now, most of our branches where we have provided this facility have sufficient stock. Therefore, there isn’t a situation of waiting period except for very large size lockers which are usually limited in quantity". While most public sector and cooperative banks offer lockers, a few private sector banks also offer lockers. In fact, chances of you getting a locker in a new private sector bank compared with an old public sector bank is higher, so check them out too.

Rent varies

It’s possible that the same size locker will cost you different at different branches. So if you want a locker at a prime location in the city, be prepared to shell out more money. Kapoor says, “The tariff for lockers varies as per the size and also the location of the branch. You can get lockers in about 10 different sizes. The tariff for the smallest size locker is Rs800 per annum and Rs6,125 per annum for the largest size locker in a branch located in an urban area. The tariff differs if the branch is located in a rural or metro area." Usually the charges are in the range of few hundreds for a smaller locker to thousands for larger lockers. For instance, IDBI Bank charges between Rs900 and Rs2,427. Generally, the locker charges in a small cooperative bank is lesser than large public sector or private bank. Remember, that bank has a right to modify the rent, but they cannot do it mid-term. Any rent modification has to be communicated by the bank to you.

Relationship matters

If you do not have an existing relationship with the bank, they will ask you to open a savings account, maintain an account balance. Having a savings account may work in your favour, since it makes rent payment easier, since the rent can be directly linked and debited from the account. It saves the hassle to make the annual visit to the branch. It’s common practice for banks to charge one year’s rent in advance. At the beginning of a new fiscal year, the bank sends a reminder to pay the rent. You can either walk in the branch and pay the rent or have it linked to your savings account.

Fixed deposit issues

Many banks will insist that you open a fixed deposit account. Take for instance, Madhurani Shinde, 35, Pune says, “I approached a bank to open a locker, they insisted that I make a fixed deposit with them of Rs50,000. That was too big an amount." As per RBI circular, banks cannot link locker facility with placement of fixed or any other deposit beyond what is specifically permitted by RBI. Banks at the time of allotment may ask you to open a fixed deposit, which would cover three years rent. Nothing more than that. If the rent for a year is Rs1,000, the bank could technically ask her to make a fixed deposit of Rs3,000. Ensure, that your banker is not trying to meet his/her target by giving you misleading information.

Reason why RBI permits this is risk management—by granting lockers only to existing customers or by insisting on an upfront payment, banks can cover eventualities such as late payment of rent or having to break open the locker.

These are a few hurdles that you will have to cross. If you are lucky, have a little patience and are well informed, you may get a locker of your choice at a branch near your house without jumping through too many hoops.

Graphic photo by iStockphoto