Experts, bankers differ on liability for loss of locker items

Consumer rights experts feel that banks are shirking their liability towards loss or damage of items kept in their lockers and not taking responsibility for it amounts to "deficiency in service".

Days after an RTI response by the RBI and several banks that there is no compensation for loss of valuables in lockers, officials of both the PSU and private banks are passing the buck to the consumers, saying clients do not disclose the contents of the safe deposit box.

The bank officials, who did not want to be identified, were of the view that burglary beyond the security cover provided by a bank was not covered under the agreement between the customer and the bank

The RTI disclosure by the Reserve Bank of India (RBI) and 19 PSU banks had said that they were not liable for damage to the locker contents by any cause, including fire or natural calamities.

Consumer experts say it will be prudent to bring transparency on what is kept in lockers so that the banks can insure the contents against any damage or loss by burglary, as bank officials are taking refuge under the reason of non- disclosure of locker contents.

Disagreeing with the experts that annual fee charged for lockers made the bank liable for all safety aspects, including loss and damage to valuables, the bank officials said that the annual fee in respect of lockers was only charged for "safe keeping".

However, they have not elaborated on what is meant by "safe keeping" and whether failure to do so will entitle the consumers for compensation.

Consumer rights expert and founder of Consumer Online Foundation, Bejon Misra, told PTI, "The government, the RBI and the banking industry cannot wash off their hands and earn money from consumers and not be made liable or accountable for quality of service for which the customers are paying rental."

Kush Sharma, a lawyer who handles consumer cases, said the banks should take the responsibility of insuring the locker contents.

To achieve this objective, he said, "There should be transparency in what is being kept in the lockers, especially when the government is focused on bringing in transparency in all financial activities."

Sharma said that once there is transparency regarding articles kept in the locker, the banks can opt for group insurance.

Misra, who also shared a similar view, said there should be a law mandating the people to declare what is being kept inside the lockers so that the same can be insured by the banks.

He also claimed that the present policy of the banks of not accepting responsibility for the contents of the lockers was due to the reason that this business was "no longer lucrative".

He said that since the November 8, 2016 demonetisation and with the government's focus on declaration of wealth, including jewellery and property, the use of lockers to store undeclared assets has been reduced by the public.

"Therefore, the business of lockers is no longer profitable," Misra said and added that the "banks are now trying to wriggle out of the liability".

"It (a bank not being liable for loss of locker contents) is an anti-consumer policy," he said.

Misra said the compensation can be determined by the consumer commissions or forums according to the facts of each case.

The facts of a case can be verified by the police when the consumer or the bank lodges an FIR subsequent to a burglary, he said.

Sharma, a locker user, said he "felt cheated" after he came to know that the banks were not liable for the damage or the loss of the content in the safe deposit boxes.

He said he was under the impression that the contents in the locker would be secure and insured and added that now he felt that it "would be better to keep his valuables at home after insuring them".

Lawyer Kush Kalra, who had sought information under the transparency law, has now moved the Competition Commission of India (CCI) alleging "cartelisation" and "anti-competitive practices" by the banks in respect of the locker service.

He has informed the CCI that the RTI response from the RBI has said it has not issued any specific direction in this regard or prescribed any parameters to assess the loss suffered by a customer.