How safe is your bank locker?

Swiss banks may no longer be a safe haven for unaccounted money, but even wealth on which tax has been duly paid is not safe in a bank locker. In a dramatic heist last month, the perpetrators dug a tunnel leading to the locker room of a Punjab National Bank branch in Sonepat, prised open 89 lockers, and decamped with the loot.
Bank lockers may not be as secure as you think they are.Besides, if the contents of your locker are stolen, you may not be eligible for compensation. The Reserve Bank of India guidelines say that banks are not responsible for the contents of the lockers they rent, though they are required to take precautions for their protection. Your valuables are also not insured. “A bank does not have the ownership or knowledge of the contents of the locker. Hence, it does not have any insurable interest in the matter,“ says an Axis Bank spokesperson.
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. “The relationship between the bank and the locker customer is that of a lessor and a lessee,“ says Narayan Raja, CEO, Banking Codes and Standards Board of India (BCSBI).
However, the National Consumer Disputes Redressal Commission (NCDRC) has rejected the argument that locker customers are only tenants and, hence, banks cannot be held liable for any loss suffered by them.In 2000, it ruled:“The depositors had taken the lockers on rent only because of the security provided by the bank, and it is not simply a landlord and tenant relationship.“

However, as things stand, the law is loaded against the customer. He not only has to prove that the locker was robbed, but also submit evidence to establish the extent of loss. In the Sonepat incident, while there is clear evidence that the lockers were indeed robbed, customers will be required to provide evidence in support of the losses they claim.
The silver lining for customers is that if they are able to prove that the loss or damage has occurred due to the negligence by the bank, they can claim compensation. “If the negligence by the bank is proved, or a bank employee is found to be involved (in the theft), it becomes a vicarious liability and the bank is liable to pay compensation,“ says Mumbai-based advocate V T Gokhale.
However, the compensation may not cover the full loss. In one case, decided by the banking ombudsman, it was established that the customer's locker had been broken into. However, the compensation awarded was just '10 lakh, even though the customer had claimed a loss of '23 lakh. Affected customers can also approach consumer courts. In several cases, where negligence on the part of bank has been proved, courts have come to the rescue of customers. In July 2007, the NCDRC awarded compensation to a customer after termites ate into currency notes and important papers kept in the bank locker. “The bank was bound to ensure that the respondent's locker remained safe in all respects,“ he commission ruled.
5 things you can do to keep your locker safe:
* Read the terms and conditions of the locker agreement before hiring one.
* Some banks make customers sign a declaration saying the bank will not be liable for loss of goods in the locker. Avoid such banks.
* Make sure that the locker is in good physical condition.
* Avoid lockers in the basement. Also, don’t take the ones in lower rows.
* Keep documents and cash in an air- and water-tight plastic pouch or bag.