Swiss banks may no longer be a safe haven for unaccounted money, but even wealth on which tax has been duly paid is not safe in a bank locker. This was reinforced earlier this week when unidentified men dug a tunnel into the locker room of a Punjab National Bank branch in Sonepat, prised open 89 lockers and decamped with the contents.
According to the Reserve Bank of India guidelines, banks are not responsible for the contents of the lockers. A bank only needs to provide for protection of the lockers.
"The relationship between the bank and the locker customer is that of a lessor and a lessee," said Narayan Raja, CEO, Banking Code and Standard Board of India (BCSBI). "Since the contents of the locker are never shared with the bank, it is not responsible for the contents."
According to Section 152 of the Indian Contract Act, a bank is not responsible for any loss or damage to the contents of a locker.
Even the valuables deposited in lockers are not insured. "A bank does not have the ownership or knowledge of the contents of the locker and hence does not have any insurable interest in the matter," said a spokesperson of Axis Bank.
The law clearly appears loaded against the customer in this case. The customer is not only required to prove that the locker was robbed but also submit evidence of the extent of the loss. In the Sonepat incident, it won't be easy for the customers to provide evidence of the losses they claim even as there is clear evidence that the lockers were indeed robbed.
However, customers can claim some compensation if they can prove that the loss or damage happened due to negligence on part of the bank. "If the negligence by the bank is proved, or a bank employee was involved (in the theft), it becomes a vicarious liability and the bank is liable to pay compensation," said Mumbai-based advocate VT Gokhale.
But the compensation may not cover the full loss. In one case decided by the banking ombudsman, it was established that the locker had been broken into. However, the maximum compensation that the ombudsman could award wasRs 10 lakh although the customer had claimed a loss of Rs 23 lakh.
Consumer courts have also come to the rescue of customers in cases where negligence is proved.
In July 2007, the National Consumer Disputes Redressal Commission ( NCDRC) awarded compensation to a customer after termites ate into currency notes and important papers kept in the bank locker. It ruled that "the bank was bound to ensure that the respondent's locker remained safe in all respects".
There is not much that a customer can do to avoid such problems. Reading the terms and conditions of the locker agreement before hiring one is always a sensible precaution, though.
Avoid entities that make customers sign a declaration saying that the bank will not be liable for loss of goods in the locker. Similarly, check that the locker is in good physical condition and is not placed in a basement.
Don't take lockers in the lower rows and do make sure that the cash and documents are sealed in an airtight and watertight plastic pouch or bag.