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Thursday, February 15, 2007

The next fight

I want to take a bank locker on rent. So you think that its an easy task? Ha ha. Wait till you try to get a locker. Just try renting a locker from any bank and they will tell you that there is a great scarcity of lockers and hence banks are "prioritizing" the locker service for customers who might be willing to keep a certain sum of money in their account. My wife walked into a number of banks in the neighborhood and all said the same. The certain sum of money varies between Rs. 1 lakh to a nonsensical Rs 5 lakh (this is what a local Vijaya Bank manager told her). I then called up at least 10 other banks and all said exactly the same thing.

Think about it. You have an account with a particular bank, but they don't have lockers free. So now, just because you need a locker, you have to open an account with another bank which has lockers, and should give it on first-come-first-serve basis, but are exploiting the need for lockers by forcing people to keep Rs 1 lakh with them. So you'd have to leave at least Rs. 1 lakh lying in the account, underutilized, earning a measly interest of some 5% when you could invest the money and easily get 20% or more.

Now this clearly smacks of malpractice, so I started searching (again on the Internet) on any RBI rules/regulations/guidelines about this matter. I found a draft circular, Draft Circular on Safe Deposit Lockers issued by the RBI on Dec 4th, 2006 (RBI/2006-07/198, DBOD.No.Leg 5049 /09.07.005/2006-07). It says:

In this connection, the Committee on Procedures and Performance Audit of Public Services observed that linking the lockers facility with placement of fixed or any other deposit beyond what is prescribed is a restrictive practice and should be prohibited forthwith. We concur with the Committee's observations and advise banks to refrain from such restrictive practices.

It can't be told in any clearer language than this. But this was a draft circular, and comments from all banks were invited by 23rd Dec. So I've to find out what the validity of this "draft" is. In any case, the RBI is aware of the problem, so I can complain to the Banking Ombudsman. A prerequisite to doing this is to complain to the bank first and either not get a reply within 30 days or get an unsatisfactory reply. So this is what I'm going to do after I'm done with the current case: start writing to the bank managers of the banks we talked to and ask them why I should not complain to the Ombudsman about this non-adherence to the fair practices code.

Let me preempt the usual comments about price rise because of supply-demand economics. I know all that. I'm sure the RBI does too. If it is still calling this a case of restrictive practice, then it jolly well knows what it is talking about.


Anonymous said...

don't you ever tire of this incessant whining? *yawn*

Unknown said...

@anon: No. Just as you don't tire of hiding behind anon tags, of keeping your eyes closed to reality, of encouraging people who want to rip you off, of being condescending when it is unwarranted, of sticking your head so far into your behind it might rot and stay there for ever.

Puneet said...

Good stuff ... unfortunately I also got a locker like this some time back ... I'm also writing to the bank about this.

Thanks for this blog. Just stumbled on it today.


Unknown said...

@Puneet: You are most welcome. I would be most interested in knowing what comes out of it.

Anonymous said...

Good effort, I am waiting to open a locker as well but not willing to do the deposit as you mention. Glad to see that you are not disheartened by the comments such as 'anon'. I'm interested in writing letters to the bank managers myself if that'll help the cause.

Unknown said...

@satish: Of course it will! Unity is strength and all that jazz. The more voices we raise, the easier is it to get people to listen. Satish, Puneet, please mail me on [email protected]. Lets start discussing on mails. Anybody else interested, please drop me a line.