Opening a bank locker? Do your homework

Mint Money’s mystery shopping exercise on opening bank lockers tells you of the issues around opening one


Opening a bank locker is not the easiest of things to do; there is a lot of homework one needs to do. And to get a sense of how a customer is treated when she approaches a bank branch to open a locker, Mint Money set out on a mystery shopping exercise. Mystery shopping is one of the tools used by regulators, companies and researchers across the world to evaluate the quality of services. It involves an individual or individuals collecting information about a service or product without the vendor knowing the consumer’s purpose.

This exercise was carried out between December and March, and the reporters approached large government-owned and private sector banks in Delhi, Mumbai, and Bengaluru. They also visited mid-sized and small banks in the three metros. When asked by bank staff, the reporters correctly identified themselves and their organisation. The reporters only enquired about the procedure for opening a bank locker; no locker was opened after the enquiry.

The mystery shopping exercise gave us insights on customer service, information dissemination, availability of the product and other issues around the opening of bank locker. Here is what we found.

Limited availability

In all the cities surveyed, lockers were not readily available, especially at the large public sector banks, including the State Bank of India (SBI) branches visited by the Mint reporters. Central Bank of India, Syndicate Bank, Bank of Baroda and Bank of India had waiting periods. Some showed us the list of names of those waiting for lockers to be allotted. As part of the exercise, we also listed our names. Most of the large private banks, mid-sized and small-sized banks had lockers available of certain sizes. For instance, Jammu & Kashmir Bank Ltd had lockers available. But none of the branches that we visited had access to a centralised repository of information to find out if other branches had lockers. One has to physically visit other branches to find out if they have lockers available. Some private bank branches said they had only 2-3 lockers left—an obvious ploy to tempt customers to open one immediately.

Customer service

Most private sector banks and mid-sized banks in Mumbai were forthcoming in explaining the procedures for opening a locker. Some bank executives took the reporters to the locker room to show the available sizes. Executives at ICICI Bank Ltd, Axis Bank Ltd and Dhanlaxmi Bank Ltd branches took the reporter to the locker rooms. On the other hand, the public sector banks did not offer to show their locker rooms. This could also be because all the branches had a waiting period for opening a locker. None of the branches (public or private sector banks) in Delhi and Bengaluru showed the reporters their locker rooms.

Savings account mandatory

All branches, except for the ICICI Bank branch in Bengaluru, asked us to open a savings bank account to get a locker. An HDFC Bank Ltd executive in Mumbai told the reporter that opening a savings account was mandatory even as she has a salary account with the bank.

Cost of opening a savings account with a public sector bank was much lower than at a private sector bank. For instance, SBI, Bank of Baroda and Bank of India have a lower minimum balance requirement in the range of Rs.500-1,000. In case of private sector banks such as HDFC Bank and ICICI Bank in Mumbai, the minimum cheque amount required to open a savings account was Rs.25,000. This, the banks, said was the initial amount which the customer can withdraw, leaving aside the minimum balance requirement, which is usually Rs.10,000 after the account is opened. And Axis Bank in Mumbai only asked for minimum balance amount.

Yearly maintenance cost

Most executives were unsure about the exact cost of renting a locker. Generally, the rent for a locker per annum was lower at public sector banks compared with private sector counterparts. Usually lockers come in three sizes—small, medium and large. Public sector banks charged between Rs.1,000 and Rs.7,000 per annum, whereas those offered by private banks were in the range of Rs.3,000-20,000 per annum. For instance, HDFC Bank in New Delhi that our reporter visited said it would charge an annual rent ofRs.3,000 for small lockers, Rs.5,000 for medium-sized ones andRs.10,000 for large lockers. But at a Union Bank of India branch in Delhi it costs Rs.1,224 a year for a small locker. Some banks also asked for a one-time fee. For instance, State Bank of Travencore charges a one-time fee of Rs.507 and stamp paper charge of Rs.120.

Fixed deposit

As part of the bank locker opening procedure, some of bank executives asked us to open a fixed deposit (FD). The amount of the FD varied across banks depending on the city and size of locker. However, not all the banks had such a requirement, these included Axis Bank and HDFC Bank in Mumbai.

The banks that asked us to open an FD included Union Bank of India (we were asked to open an FD of Rs.50,000), Central Bank of India ( an FD of Rs.20,000), Syndicate Bank (Rs.10,000), SBI (Rs.50,000), Bank of Baroda (Rs. 20,000), ICICI Bank (Rs.10,000-30,000) and Dhanlaxmi Bank (Rs.1-5 lakh).

Insurance and mutual funds

Besides FDs, some banks also tried to sell us insurance and debt mutual funds. For instance, the ICICI Bank branch we visited in Mumbai insisted that we have to buy a unit-linked insurance plan—ICICI Pru Wealth Builder II—and that it was mandatory to take this policy to get a locker. The premium amount would be Rs.1 lakh per annum. The executive said we could discontinue it after 5 years. In Mumbai, an SBI executive asked us to buy an SBI Life insurance product which he said was compulsory.

An HDFC Bank executive in Delhi insisted that we make an investment of up to Rs.1 lakh in an HDFC Mutual Fund debt scheme. However, he said the investment was not mandatory but a customer with an investment would be preferred since there is a waiting list.

Regulatory requirement

According to the Reserve Bank of India (RBI) master circular on customer service in banks ( , linking the locker facility with placement of fixed or any other deposit beyond what is specifically permitted is a restrictive practice and should be prohibited. Hence, RBI has advised banks to refrain from such restrictive practices.

But banks may face situations where the locker holder neither operates the locker nor pays rent. Hence, to ensure prompt payment of locker rent, RBI permits banks at the time of allotment to obtain an FD which would cover three years’ rent and the charges for breaking open the locker in case of an eventuality. But banks should not insist on FDs from existing locker holders. The RBI circular asks branches to maintain a wait list for the purpose of allotment of lockers and ensure transparency in allotment. If customers have any grievances, they can raise the issue with the customer redressal service of the bank. In case the bank doesn’t respond within a month, customers can approach the ombudsman.

Mint Money take

The mystery shopping exercise revealed that a customer should do her homework well before opening a locker. So, here is what you should do. First, shop around. Since most of the banks will ask you to open a savings account, visit your bank branch for a locker. Second, if lockers are not available, check the minimum balance requirement to open a savings bank account with other banks. Next, look at the rental cost of each locker size. Always ask the bank to show you the locker room and the locker size before opening one. And if the bank insists on selling you a particular investment product, refrain from taking a locker there, unless you actually want the product.