56% to shut bank lockers due to rising rentals, KYC requirement: Survey

Under the RBI guidelines for banks, revised locker agreements, defining responsibilities and liabilities, must be signed and submitted to the bank branch by account holders before December 31, 2023.

Ahead of the bank locker renewal deadline on December 31, a survey by community-based social network LocalCircles found that 56 per cent of locker holders have either closed their lockers or are planning to do it soon. Locker holders attributed their decision to the heightened Know Your Customer (KYC) requirements and a continued hike in bank charges.

The survey found that more than one-third of respondents indicated that they had surrendered their bank locker. The data also revealed that, in the last three years, 36 per cent of respondents have closed their lockers, while only 16 per cent have been paying the higher rate and complying with KYC requirements but are considering shifting to smaller lockers. The survey received over 23,000 responses from citizens located in 218 districts. 

 

Under the Reserve Bank of India (RBI) guidelines for banks, revised locker agreements, defining responsibilities and liabilities, must be signed and submitted to the bank branch by account holders before December 31, 2023.

Initially set for January 1, 2022, the deadline was postponed by the RBI for a year due to minimal progress by banks and the necessity for modifications in the model locker agreement.

Under the new agreement, banks' responsibility for content and safekeeping has been redefined. Banks now act as lessors, and customers are lessees, with a contract specifying rights, duties, locker rent, and more. The liability of a bank for losses due to negligence may be up to 100 times the annual locker rent. The new rules limit locker contents to jewellery and documents, excluding illegal and hazardous materials. 

However, according to the survey report, some locker holders may not be able to sign agreements by the deadline, especially NRIs, prompting calls for electronic signing options.

The report further noted that despite the assurance of safety and clearly defined responsibilities, a substantial increase in locker rental fees has led to 56 per cent of surveyed locker holders either surrendering their lockers in the past three years or planning to do so. Concerns are also rising about the affordability of locker rents and the responsibility of banks to ensure they remain reasonable. 

Here are some of the key findings of the survey: 

1. A significant 56 per cent of bank locker holders have either already closed their lockers or are planning to shut down or downgrade to a smaller size in response to increased KYC requirements and substantial rises in locker charges.
2. In response to the increased locker charges and stringent KYC requirements, 36 per cent of respondents have closed their lockers in the last three years, while 16 per cent are paying higher rates but plan to shift to smaller lockers. 
3. Only four per cent have been paying higher rates and complying with KYC but intend to shut their lockers. 
4. On the other hand, 36 per cent are continuing to pay the new rates and comply with KYC, and eight per cent remain undecided.

Another issue causing dissatisfaction among customers is the direct debit of locker rent from the secondary person authorised to operate the locker. 

1. Of the respondents, eight per cent reported that banks directly debited locker rent from the secondary person authorised to operate the locker and having an account at the bank. 
2. 88 per cent said that banks directly debited it from the primary account owner's bank account and four per cent used cheques. 

“What is upsetting to some is that when the locker rent is not being paid by the primary locker owner, the banks are directly debiting it from the secondary person authorised to operate the locker and having an account at the bank. In many cases, the secondary person may not even be using the locker. In such cases, it is unfair to penalise him/her without consent or informing,” said the report. 
 

What major banks are charging for lockers: 

The State Bank of India (SBI) provides a variety of bank locker sizes categorized as Small, Medium, Large, and Extra Large, with annual locker rents ranging from Rs 1,500 to Rs 9,000. The rental amount is contingent on the locker size and category.

HDFC Bank offers locker rentals starting at Rs 1,350 for extra-small lockers and going up to Rs 20,000 for extra-large size lockers.

For Bank of Baroda, locker rentals commence at Rs 1,500 for Class A lockers and go up to Rs 10,000 for Class L lockers.

IDBI Bank provides bank lockers with annual rents starting from Rs 700 and going up to Rs 19,000, depending on the size and category of the lockers.