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Why is it difficult to get a locker?
Finance - Banking

We do have lockers available, madam,” said the relationship manager (RM) of a private-sector bank near my home in west Delhi. I was ecstatic to hear an answer in the affirmative after trying my luck at several banks across the city.

I was relieved that I would not have to worry about my jewellery and other valuables any more. “We have medium-sized lockers available. Will it serve your purpose?” asked the RM. That was exactly what I was looking for. However, my happiness was short-lived. On asking about the rent and paperwork, I was told that the annual rent was Rs 1,600 and I had to provide proof of residence and a copy of my PAN card.

And then came the sucker punch. I had to invest Rs 10,000 in a fixed deposit! “Don’t worry, madam,” the RM assured me. “Your fixed deposit will earn interest. Till you hold a locker with us you cannot withdraw from it. It is sort of a security deposit.”

The same story was played out at another bank. Lockers were available at an annual rent of Rs 1,300. But here the bank asked for Rs 50,000 investments in financial products sold by it.

Says Harsh Setia, a Bangalore-based engineer: “I went to at least six banks. Everywhere they asked me to open an account and invest in a product. In fact one back wanted me to buy financial products worth Rs 2 lakh as a pre-requisite for getting a locker.”

Across the country banks, both public- and private-sector ones, are thumbing their nose at the Reserve Bank of India ( RBI )) directive that prohibits investment in fixed deposits or any other financial product as a pre-condition to the opening of lockers.

According to the central bank’s guidelines, banks “may face situations where the locker-hirer neither operates the locker nor pays rent. To ensure prompt payment of locker rent, banks may at the time of allotment, obtain a fixed deposit which would cover three years’ rent and the charges for breaking open the locker in case of an eventuality”.

Banks, however, have their own reasons for insisting on a “financial relationship” with a prospective locker-owner. “While it is not mandatory, we ask customers to open either a current or savings account with us for operational convenience of rent recovery,” says Surinder Chawla, head (retail liabilities product group), HDFC Bank . “A savings account facilitates easier rent payments by way of direct debits,” adds Puneet Kapoor, executive vice-president, Kotak Mahindra Bank .

So is there a way out? If you are unwilling to open an account or invest in products that the bank is selling, then the easiest way to get a locker is to share it. While banks allow allotment of a locker on a joint-holder basis, the second holder can be added later. In such cases, the banks ask the first locker holder to give a written declaration of the relationship with the second holder.

The second holder also has to fulfil the know-your-customer (KYC) norms before being registered as a joint holder. “When you sign up as an additional locker holder and the locker is operated on an either/or basis, then the new holder has independent access to the locker,” says Kapoor.

Another way to safe guard your jewellery is by availing of an overdraft against gold jewellery. This is a short-term measure and should be used only in an emergency.

Apart from non-banking financial companies (NBFCs) such as Muthoot Finance and Manappuram Finance, some public and private banks too offer this facility. Under the facility, the jewellery is pledged and a percentage of its value is parked in a current account.

Some banks and NBFCs also charge a small processing fee. You have to pay interest only when you make any withdrawal. A flip-side to this solution is that thie facility has to be renewed frequently.


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