Want a bank locker? You may be asked to buy insurance, ULIP or investment first
Published by India Today
Abhishek Kumar's role: Quoted
Abhishek Kumar explained that RBI rules bar banks from tying locker allotment to other products, and said customers can refuse, ask for the demand in writing and escalate to the RBI Ombudsman if needed.
What Abhishek Kumar said
Can a bank ask you to buy insurance or invest before giving you a locker?
No. Banks are strictly barred from making locker allotment conditional on buying any other financial product or service. Under RBI norms, the one deposit a bank may require is a fixed deposit that covers no more than three years' rent and the charges for breaking open the locker. Any demand to buy insurance, mutual funds or other investments breaks those regulatory norms.
Why do some bank branches push products on people asking for a locker?
In our experience, locker services earn banks little and carry a heavy administrative load, while selling third-party products such as insurance or ULIPs brings commission income and helps staff hit demanding monthly sales targets. So lockers get used as bargaining chips to draw customers into higher-revenue products. The practice is fairly widespread, especially in busy urban branches where lockers are scarce.
What are the warning signs that a locker allotment is not being handled properly?
The proper process is for the bank to keep a transparent waitlist and give you an acknowledgment with a waitlist number. I would treat it as a red flag if staff say a locker is available only if you invest, if they decline to let you see the allotment register, or if they ask for a fixed deposit worth more than three years of rent plus break-open charges.
What should you do if a bank links your locker to buying a product?
I suggest refusing the product and pointing to the RBI's Master Direction on safe deposit lockers. Ask the official to put the demand in writing or show the internal policy behind it. Complain in writing to the branch manager and keep the acknowledgment; if there is no satisfactory answer within 30 days, take it up with the Principal Nodal Officer at the bank or with the RBI Ombudsman, or complain online on the RBI's portal. Giving in only keeps such mis-selling going.
In our words, from what he said in the piece. General information, not personal advice.
More of Abhishek's views on insurance
Part of India Today's series on bank lockers, this article reports cases where customers were asked to buy insurance or investment products before getting a locker. It sets out what RBI rules allow, why branches push such products, the warning signs and how customers can complain.
Publisher source
Want a bank locker? You may be asked to buy insurance, ULIP or investment first