Mudra Compass

According to a report by Aurm, an Indian startup offering locker services, there’s a substantial disparity in the availability of bank lockers in India, creating a pressing need for accessible and convenient locker facilities. Aurm predicts that by 2030, approximately six crore affluent Indians residing in urban areas will require safe deposit storage lockers. However, the current number of bank lockers in the country stands at only 60 lakhs. This indicates a significant gap of around 5.4 crore lockers between demand and availability, as per the report commissioned based on discussions with banking officials and data collected from various Reserve Bank of India (RBI) reports.

According to the Aurm report, the shortage of lockers is anticipated to worsen in densely populated urban areas due to limited bank space and high rental costs. Indian households are estimated to possess between 22,000 to 25,000 tons of gold, yet there are only 60 lakh lockers available across public and private banks. Ganesh Balakrishnan, co-founder of Aurm, emphasized the significant disparity between locker demand and supply. He highlighted that this gap is likely to expand further with the increasing purchasing power of Indians, underscoring the urgent need for accessible, secure, and convenient locker facilities nationwide.

In India, households typically allocate 10-15 percent of their assets, either as jewelry or investments, to bank lockers. However, limited access to these lockers leaves them vulnerable to theft, burglaries, and fraud. While the availability of bank lockers is a significant concern in India, there is also the challenge of security breaches within these lockers. According to the Union Ministry for Finance, from April 2014 to March 2017, a substantial amount of Rs 180 crore was lost in a total of 2,632 incidents involving robbery, theft, and burglary across 51 banks.

The disparity between demand and supply presents an exclusive opportunity for private entities, particularly startups, to enter the market with advanced locker solutions. Aurm is seizing this opportunity by offering a fully automated, secure, and convenient locker system that operates 24/7, effectively addressing the increasing demand for lockers.

New Rules Implemented last year by RBI

In accordance with RBI regulations, agreements must be drafted on stamp paper, which banks are obligated to furnish at no cost. The revised agreement aims to safeguard the interests of locker holders. A circular issued by the RBI on January 24, 2023, advises banks to assist customers in completing new or supplementary agreements through various means such as arranging stamp papers, franking, electronic execution, e-stamping, etc., and to furnish a copy of the executed agreement to the customer.

As per RBI guidelines, banks are required to furnish customers with a copy of the agreement. The guidelines state, “A copy of the locker agreement signed by both parties shall be furnished to the locker-hirer to inform her about her rights and responsibilities. The original agreement shall be retained with the bank’s branch where the locker is situated.”

Upon locker allocation, banks are permitted by the RBI to secure fixed deposits (FDs) equivalent to three years’ worth of rent and charges for breaking open the locker, if required. This measure is implemented to address scenarios where the locker-holder fails to utilize the locker or fulfill rental obligations. However, it’s important to note that banks are prohibited from breaking open lockers belonging to customers with a commendable track record.

Furthermore, if the bank collects locker rent in advance but the locker-holder decides to surrender the locker before the agreed-upon term, the bank is obligated to refund the proportionate amount of advance rent collected.

The bank holds no liability for any deterioration or damage to the contents of the locker, irrespective of whether it’s caused by rain, flood, earthquake, lightning, civil disturbance, riot, terrorist attack, or negligence on the part of the customer.

While banks are accountable for ensuring the safety and security of the premises housing safe deposit vaults, they must compensate locker-holders for occurrences such as fire, theft, burglary, robbery, dacoity, building collapse, negligence by the bank, or fraudulent actions by its employees. The bank’s liability in such cases will amount to 100 times the current annual rent of the safe deposit locker.

To ensure security, it is advised to register your email address and mobile number with the bank. Upon locker operation, banks will send email and SMS alerts, specifying the date and time of access. Additionally, banks will offer a mechanism for addressing unauthorized locker access.