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Financing -- Loans/Security measures for Safe Deposit Locker Facilities.

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QUESTION: Dear Holt

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: I apologize for the delay in my response.  I would tell you to overcome any scam and or theft regarding a safety deposit box is primarily managed by the fact that each box requires two separate keys.  The bank maintains a master key that goes into each box but in addition to this each box requires a key that is held by the customer.  So each box requires two separate keys to open and this would be the first line of defense in managing these boxes.  In addition to this I'm sure each bank has adequate insurance to cover any theft or losses by other reasons.  Hopefully this answers your questions.

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

QUESTION: Dear Holt

Thank you.

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
I would believe that the bank would be responsible for providing insurance for contents kept within the safety deposit box.  I'm sure each bank has a different policy that may have different limitations and types of coverage.  I believe that any type of insurance policy may work if you can find the client to purchase it.  However, I believe this would be a difficult sale since each box requires two keys to open and the owner of the box maintains one of those keys.

Financing -- Loans

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JT Holt

Expertise

Questions regarding the financing or land values of farm, ranch, and recreational properties. Large working ranches to the small hunting property.

Experience

Currently CEO of LandLoanSpecialists.com with 10 years of previous experience in the Farm Credit System as a VP of Credit. Experience as an appraiser of farm, ranch, and recreational properties.

Education/Credentials
Bachelors of Agricultural Economics from Oklahoma State University. Continuing education courses in ag finance and appraisals.

Awards and Honors
Top volume lender for the last 5 years in previous position.

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