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Economics/Security measures for Safe Deposit Locker Facilities.

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Question
QUESTION: Dear Pallas

http://en.wikipedia.org/wiki/Locker_(cabinet)‎
http://en.wikipedia.org/wiki/Locker‎

Safe Deposit Locker Facilities are provided to Banking customers to put their valuable belongings viz Jewelry, Cash etc by Private, Public Sector Banks. Banks charge their customers for the Lockers Facilities.

In a worst to worst scenario, How do the Banks do risk management in case if there happens Locker robbery, Scams etc so that the customers get back their valuables kept in the Lockers ?.

Awaiting your reply,

Thanks & Regards,
Prashant S Akerkar

ANSWER: Thank you for your query. I believe you are talking about safety deposit boxes.  Given the nature of the service offered by a bank, not only a place to securely store valuables, but, extreme privacy. No questions are asked as to what the client puts inside, my opinion is that the bank may just be liable for a certain amount per box, should damages occur.  would be up to the client to insure his/her valuables, but, again, there are no questions asked about what is being stored. Thus would be very difficult to put a value on a claim. Good luck!!!!


---------- FOLLOW-UP ----------

QUESTION: Dear Pallas

http://en.wikipedia.org/wiki/General_insurance

Do you feel a General Insurance Policy against the safe deposit Locker can help in this regard ?. Are these policies available ?.

i.e. Banks will provide this Facility to their Customers by issuing a General Insurance policy against the Locker to protect there valuables kept inside the Locker. Banks can also tie up with General Insurance cos who provide these facilities.

For example : If a customer feels that his valuables kept in the Locker are Rs 5 Lacs worth, he/she will purchase 5 lacs General Insurance policy
and pay yearly premium to the General Insurance co.

In case robbery or scam happens within the bank, the Customer can only claim Maximum Rs 5 Lacs from Insurance co. The Insurance co will inspect by going to the Bank locker place and check whether really this event has happened to pay for the claims made by the customer.

Do you feel this may work ?.

Awaiting your reply,

Thanks & Regards,
Prashant S Akerkar

Answer
Thank you for your follow up. I do not think that it will work out given the privacy involved. People are not required to disclose what they keep in such boxes. If you were to insure the contents, then, the whole privacy issue is out of the window. In case of robbery, each customer is on his/her own. The bank does not know what each one of the customers has in his/her box. Privacy is key to this service. Good luck.

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Pallas21

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