To understand what role NBFC going to play in new locker facility permission provided by Regulatory, let us first understand what is locker facility
Locker is a place where we keep our things safe. The main advantages of a Bank Locker are – we are able to maintain our Privacy, Secrecy and keep things possessively. It is here we keep our important documents, jewels and other valuables. The Banks charge a fee for the services rendered, of course, governed by the RBI guidelines.
Locker facility in NBFC
The recent news is that Reserve Bank of India, has now permitted NBFCs (Non Banking Finance Companies) to extend Locker facilities to its customers, however, with a restriction that it shall not be under the RBI regulations. How did this happen?
NBFCs were requesting RBI for permitting them to extend the Locker Facility to its customers, since it is a fee based service. RBI permitted the NBFCs to extend such service, under following conditions
- The Deposits obtained on these Locker Accounts by the NBFCs will not attract any interest as in the case of a Scheduled Commercial Bank, since this is only a service oriented activity.
- Secondly RBI has made it very clear that Locker Facilities extended will be a fee based service, and that the NBFCs should keep the customers informed that the said service will not come under RBI Regulations.
How does locker facility of NBFC make a difference?
Banks offer Lockers of various sizes viz Small, Medium and Large Lockers, and the rent depends on the size of the Locker and the location of the branch. Precisely Bank Lockers in busy areas are never available since, the Lockers are hired by people and never surrendered, and held by them till death. There is always a huge demand for Bank Lockers and now that RBI has given permission to NBFCs, the position should get eased out.
The modus operandi for renting out a Locker by NBFCs has not been worked out, and NBFCs should now be taking a call to assess as to whether introduction of Lockers would be beneficial to them and if so the income generated thereon etc., should be worked out. They have yet to come out with the rent and size of Lockers they would be providing. However, it is for sure that Demand is always higher than the Supply, as far as Locker facility is concerned.
What customer can expect from locker facility in NBFC
A customer may decide to avail the Locker facility from an NBFCs, but should keep in mind the following:
- Items in the Lockers will not be insured (neither it is insured by a bank) and hiring a Locker will be at the customers’ own risk and responsibility. However, the items can be personally insured by a customer.
- NBFCs are not governed by RBI regulations.
Let us wait and see the demand for NBFC Lockers in the coming days.