Why bank lockers are hard to get and what you can do instead
Published by India Today
Abhishek Kumar's role: Quoted
Abhishek Kumar explained that demand has outpaced supply because lockers earn banks little, and that lockers are often tied to buying other products. He compared private vaults with bank lockers and advised insuring the contents of a private locker.
What Abhishek Kumar said
Why have bank lockers become so hard to get?
It is a mix of demand and supply. Demand has gone up as affluent Indians have more purchasing power and own more gold. At the same time, banks are holding back on new lockers to manage liability risk and the compliance burden, and because lockers earn them little compared with other financial services. In metros, limited branch space and high property costs make the shortage worse.
Do banks give lockers only to customers who buy their products?
Informally, it does happen: bank staff often allot lockers to people who also buy the bank's financial products. Officially, RBI does not allow banks to tie locker allotment to any product. With falling availability, higher rents and capped bank liability, I feel locker access is becoming a privilege, and middle- and lower-income customers are finding it harder to get one.
How do private vaults compare with bank lockers?
Private vaults usually offer more convenience, with longer hours, better biometric technology and quicker service. They cost more because they spend heavily on security and charge a premium for skipping the waiting list. Bank lockers, on the other hand, are governed by strict RBI rules, and that brings institutional safety and a standard compensation framework that private operators may not always offer.
Should I insure valuables kept in a private locker?
Yes, I would strongly advise insuring the contents. The private operator's liability is usually limited by the rental agreement, so if something goes wrong, that agreement alone may not make good your loss. Only a separate policy that you take out yourself can make sure you recover the full value of what you kept in the locker.
In our words, from what he said in the piece. General information, not personal advice.
More of Abhishek's views on money management
Part of a series on bank lockers, this article explains why lockers have become hard to get in India. It covers the gap between demand and supply, RBI rule changes that raised costs for banks, the linking of lockers to other products, and private vaults as an alternative, along with their costs and the need for insurance.
Publisher source
Why bank lockers are hard to get and what you can do instead