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452.   My Safety deposit locker is it safe - Do banks insure safety deposit boxes?

Questions:  A friend of mine wrote to me from India about the rise in thefts from bank lockers. He sent me a photo also as proof that I am sending to you. Is this true? As a OCI in USA I also have a locker in India as we cannot travel these days with family gold jewellery overseas due to safety and customs duty concerns. My question is if my locker is safe in India and do banks insure the boxes they rent out for a hefty fee. Appreciate an honest answer. Thanks, Rakesh Agarwal                         Answer:   Thefts from bank lockers do happen from time to time, there have also been reports where a bank manager was arrested for stealing from a customer's bank locker. No one can guarantee that any bank locker in India is a hundred percent safe!  Theft from bank lockers is reported in India from time to time. The photograph you sent (posted on this page) I think is from a robbery that occurred a few years back, I believe November 2009 in Chirgaon, a town about 30 kilometers from Jhansi, were several bank safety deposit lockers were cut open by robbers. Around 40 plus lockers were robbed of their contents. The bank apparently had no alarm feature. Banks normally refuse to entertain any claims for thefts from safety deposit boxes on the grounds that they simply rent out the locker, and their relationship with the person renting the box is that of landlord and tenant, hence they are not responsible for the contents of the box and that they have no way of even knowing the contends of the safety deposit boxes.  Furthermore, most banks ask customers to sign a declaration saying that the customer will not hold the bank liable for loss of goods in the locker. Generally this type of wording can also be included in the locker rental agreement.

Are banks liable for theft from safety deposit boxes?

While banks position that they only rent out the safety deposit boxes and are not responsible for the contents may stand to be correct to some extent, they are however required to ensure that they have proper checks and balances to safeguard safety deposit boxes they rent out. They should have proper burglar alarms, cameras, etc. to keep the boxes safe. In cases of theft where banks fail to provide adequate safeguards, they can and have been, held responsible by courts and ordered to compensate customers whose lockers have suffered losses due to theft. Even the National Consumer Disputes Redressal Commission has rejected banks' argument that depositors are the only tenants of the lockers and hence, banks cannot be held liable for any loss suffered by them. Consumer courts in India, are empowered to award compensation for the actual loss as well as for any significant loss of the consumer.  They can also award disciplinary damages, besides cost of litigation.

How Safety Deposit Box owner can protect their box contents

Even if courts rule that a bank is liable to pay when a robbery occurs in a bank and safety deposit boxes are robbed, the banks will not give everyone whatever they claim to have lost. Since the bank has no record of what is kept in a safety deposit box, it is up to the box owner to prove what they had stored in the box when it was robbed. While this is not easy, there are some things people can do to protect themselves to some extent. Make an inventory of all the goods that you place in your bank safety deposit locker. For all jewelry items stored in your locker, take photographs for each individual item. Jewelry items should be weighed and documented, an appraisal document helps. Keep receipts of any jewelery purchases. While receipts prove ownership, don’t make the mistake of storing your receipts in the same locker where your jewelery is stored. Avoid keeping cash in safety deposit boxes as this is not easy to prove. Keep photo copies of all documents in your safety deposit box. When putting things in or taking things out of your locker, ensure you don’t leave items outside. Remember bank employees are human also and there have been cases of bank employees stealing. Don't allow a bank employee to open or close the box for you. Last but not least, get safety deposit lockers only in reputable banks.

Are Safety Deposit Locker Contents Insured in India?

The contents of a safe deposit box rented by banks to consumers, are not considered to be deposits in the bank, and are not insured by the DICGC (Deposit Insurance and Credit Guarantee Corporation).

Are Safety Deposit Box Contents Insured Abroad?

Banks in foreign countries also do not provide insurance against theft of contents from safety deposit boxes. However, they are normally up to date on security features. Here again, keep track of what you have stored in your foreign bank safety deposit box just in case proof is required if an unfortunate situation does arise. Private insurance of special valuables is always an option. While foreign banks also don’t know what a person stores in their safety deposit box, here’s a clause that I came across in a foreign banks rental agreement that allows them the right to check your box: Contents I will not deposit in the Box/Compartment any liquid or anything else that may be a nuisance, dangerous or illegal. I will let you inspect the contents of the Box/Compartment, in my presence to satisfy yourself that I have complied with this condition’ While this rarely happens, they do have a right to check.    
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