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Economics/Security measures for Safe Deposit Locker Facilities.


QUESTION: Dear Warren‎‎

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: Prashant, I can't speak to how banks do safe deposit boxes in India, but I can tell you how they're done here in the U.S. Safe deposit boxes are inside a walk-in bank vault which is guarded by a security cop. Anyone who wants to get in must provide photo I.D. and proof of having written permission to access a given box. While doing so, the person is watched. Therefore, I think the scenario you envision is moot, at least here in the U.S.

Why don't you call a bank in India, say you're thinking about opening a safe-deposit box, and express your concerns about 'scams, etc.' to them. I'll bet they can assuage your concerns very quickly.

Please do me the favor of completing the rate-the-expert e-mail you'll receive on the heels of this reply. Your ratings and, especially, your written comments help me do a better job of helping people like you who ask such interesting questions.

Hope I've helped you here, Prashant.


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

QUESTION: Dear Warren

Thank you.‎

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.

Awaiting your reply,

Thanks & Regards,
Prashant S Akerkar

Again, Prashant, I can't speak to safe-deposit box policies in India. I cannot imagine that such policies would sell in the U.S. because banks, as fiduciaries with custody of what's in the boxes that depositors rent, would surely carry enough insurance to protect everything.

One tip, if you don't mind: that link you provided for 'general insurance' was dead because of the #8206 at the end of it. When I removed that, it worked fine. So here's a corrected version of the link to General Insurance.

Take care, Prashant. I can see you're a creative guy.



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Warren D. Miller, CFA, CPA, ASA


My expertise in economics is limited to three sub-disciplines: Austrian economics, industrial organization, and evolutionary economics. Questions dealing with macroeconomics and other sub-disciplines of the subject should be submitted to those who have the appropriate expertise. N.B.: I DO NOT ANSWER QUESTIONS MARKED 'PRIVATE' because I believe that knowledge should not be hoarded. I also believe that such questions are likely to come those trying to cheat. Also, as one who was a full-time academic for half a decade, I can recognize test/homework questions several time zones away. Do not demean yourself by submitting such questions to me. Those who do so are cheating; I WILL call you out publicly. I have a zero-tolerance policy for cheating and dishonesty. In addition, please don't emulate the businessman who posted a request for help in August 2008. He expressly denied that he was seeking "investment advice" and said that his query was for, and I quote, "educational and informational purposes." Later, he allowed as how his questions related to the possible purchase of a $500K piece of equipment. I said I thought he had misrepresented himself. Bottom line: high-end business consulting is how I make my living. I am the sole support for my family. Please respect that fact and don't try to get for free what our clients pay for. If your company is big enough to have a sophisticated problem, it can afford to pay for the expert advice we and others provide. Beckmill Research, LLC, is a 95-octane firm. We're small, but we've been at this for nearly 20 years. We know what we're doing. Segue: Early on, some asked me for career advice; I gave it. I now get many such requests. The demand for a valuable good that is free is unlimited, so I now charge for that advice. Email me: Finally, PLEASE DO NOT ASK FOR INVESTMENT ADVICE. I am not licensed to provide such advice. If you want such counsel, talk to your financial planner or other financial adviser.


I work with Austrian economics (which differs in major respects from the traditional economics), industrial organization (which is about industry structure, conduct, and performance), and evolutionary economics (almost, but not quite, the economic analog of its biological counterpart) every day in my work. I appraise closely-held businesses, provide exit-planning services, and offer high-level strategic analysis, advice, and solutions to CEOs and owners of mid-sized businesses. Understanding, applying, and writing about these disciplines is an essential part of how I have made my living since 1993.

CFA Institute, Strategic Management Society, American Society of Appraisers, Academy of Management, Culver Legion, National Association of Scholars.

CFA Magazine, Strategic Finance, Valuation Strategies, Journal of Advanced Property Economics, Harvard Business Review, American Fly Fisher, CFA Digest, CPA Expert, Business Valuation Review, among others

Chartered Financial Analyst designation (2006); Accredited Senior Appraiser in Business Valuation (2006); Certified Public Accountant (1992); MBA - Oklahoma State University (1991); Completed all of my Ph.D. coursework in strategic management - Oklahoma State University (1983-87); BBA in finance and accounting - U. of Oklahoma (1975)

Awards and Honors
Business Valuation Volunteer of the Year (2001) - American Institute of CPAs; Winner - Oklahoma Humorous-Speaking Contest - Toastmasters International (1971)

Past/Present Clients
Names are confidential. However, the "sweet spot" of our target market is companies that are too big to be small and too small to be big. Usually, those are companies with employees in the 15-to-100 range. At the low end of that range is where companies can first take advantage of the specialization of labor. However, having everyone do everything is a tough habit for many--most, I would argue--small enterprises. That is why they not only remain small, but also fail to survive beyond a second generation. Only 5% (one in twenty) companies make it to the third generation of ownership.

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