This fourth part of the Lock & Key series highlights growing concerns around how bank lockers are being allotted in India, revealing a widening gap between official rules and actual practices on the ground.
The issue is illustrated through the experience of a customer at a private bank who approached for a locker and was willing to meet standard requirements, including maintaining a fixed deposit. However, instead of a straightforward process, he was allegedly told that his request would only be considered if he purchased additional financial products—either a ULIP worth around ₹1 lakh or a term insurance policy of about ₹40,000. When he refused, his locker request was effectively denied.
Such conditions, however, are not permitted under regulatory norms. The Reserve Bank of India (RBI) has clearly stated that banks cannot link locker allotment to the purchase of any financial product or service. The only requirement banks are allowed to impose is a term deposit that covers up to three years of locker rent, along with charges for breaking open the locker if needed. Any demand for insurance, mutual funds, or similar products violates these guidelines.
Despite this clarity, experts suggest that many customers face informal pressure to buy additional products, especially in urban branches where locker availability is limited. The scarcity of lockers often puts customers in a difficult position, forcing them to either wait indefinitely or agree to such unofficial conditions.
This practice is largely driven by incentives within banks. Locker services themselves generate relatively low revenue and involve administrative costs, whereas selling products like insurance or ULIPs earns commissions and helps staff meet sales targets. As a result, lockers are sometimes used as leverage to push higher-margin financial products.
The problem arises not from offering these products, but from making them a condition for accessing a basic banking service. This undermines transparency and places customers—particularly those unaware of the rules—at a disadvantage.
Customers facing such situations are advised not to comply under pressure. They can cite RBI guidelines, request written justification for any additional requirements, and ask for the bank’s official policy. In many cases, such demands are not documented, which itself signals irregularity.
There are also clear warning signs to watch for, such as the absence of a proper waitlist system, refusal to provide acknowledgment or waitlist numbers, or demands for deposits exceeding the permitted limits. Claims that lockers are available only if a product is purchased should be treated as a red flag.
If a bank refuses a locker unfairly, customers can file a written complaint with the branch and seek acknowledgment. If unresolved within 30 days, the matter can be escalated to the bank’s Principal Nodal Officer or the RBI Ombudsman. Complaints can also be filed online through the RBI’s Complaint Management System.
As demand for lockers increases, the way they are allocated is coming under greater scrutiny. While regulations are clear, the growing disconnect between policy and practice raises a broader concern about whether lockers are still being treated as a standard banking service or increasingly used as a tool for cross-selling financial products.
