A customer at a private bank walked in to request a locker, a fairly routine banking need. He was ready to meet the formal requirements, including maintaining a fixed deposit linked to the locker.
But instead of a simple application process, he was given a choice. Buy a ULIP worth around Rs 1 lakh. Or take a term insurance policy of about Rs 40,000.
Only then, he was told, could his locker request be considered.
The customer (wishes to remain anonymous), who has an account with Kotak Mahindra Bank, refused. He said he was willing to make the required fixed deposit, but not buy financial products he did not need. His
What makes this more concerning is that such conditions are not part of the rules.
This is the fourth part of Lock & Key, a series that examines how India’s bank locker system really works, from safety and insurance to access and now, the growing concerns around
The Reserve Bank of India has laid down clear guidelines on how lockers should be allotted.
“Banks are strictly prohibited from linking the allotment of bank locker to the purchase of any other financial product or service,” said Abhishek Kumar, Seni Registered Investment Adviser (RIA) and founder of Sahaj Money.
According to RBI rules, the only financial requirement a bank can mandate is a term deposit covering up to three years of locker rent and charges for breaking open the locker in case of emergencies.
“, mutual funds, or additional investments is a violation of these regulatory norms,” Kumar said.
Despite these rules, customers say the reality can be very different.
“Customers are frequently pressured to purchase insurance or other investment products as a hidden condition for locker allotment,” Kumar said.
He added that this is not an isolated issue.
“This practice is relatively widespread, particularly in high demand urban branches where the scarcity of lockers gives staff leverage over applicants.”
With lockers in short supply, customers often face a difficult choice — wait indefinitely or agree to additional conditions.
“Many customers comply with these informal demands simply to avoid long wait times or potential rejection,” he said.
The reasons behind this behaviour lie in how locker services are positioned within banks.
“In our experience, branch staff push these products primarily because locker services offer low profit margins and involve high administrative overhead,” Kumar said.
In contrast, selling financial products brings direct revenue.
“Selling third party products like insurance or ULIPs generates significant commission income and helps staff meet aggressive monthly sales targets.”
This creates an incentive to use lockers strategically.
“Lockers are often used as bargaining chips to ‘hook’ customers into high revenue products,” Kumar said.
The issue is not that banks offer financial products — but how they are linked to services.
When access to a basic facility like a locker depends on whether a customer agrees to buy a product, it raises questions about fairness and transparency.
It also puts customers in a difficult position, especially when they may not be fully aware of the rules.
Experts say customers should not feel compelled to accept such conditions.
“A customer can refuse to purchase the linked product and immediately cite the RBI Master Direction on Safe Deposit Lockers,” Kumar said.
He advised customers to ask for clarity.
“They should request the bank official to provide the demand in writing or point to the specific internal policy that mandates such a purchase.”
In most cases, such conditions are not documented formally.
“It is generally better to refuse and escalate the matter rather than complying, as yielding to mis-selling encourages the continuation of such practices,” he said.
Customers can identify potential issues by looking for certain warning signs.
“The proper process requires the bank to maintain a transparent waitlist and provide an acknowledgment with a waitlist number,” Kumar said.
If this does not happen, it may be a concern.
“Significant red flags include staff claiming a locker is available only if an investment is made or refusing to show the locker allotment register.”
Another warning sign is excessive financial requirements.
“Any demand for a fixed deposit that exceeds the value of three years of rent and break open charges is a major indicator of non-compliance,” he said.
Customers who feel they have been treated unfairly do have options.
“Customers should first file a formal written complaint with the branch manager and ensure they receive an acknowledgment receipt,” Kumar said.
If the issue is not resolved, it can be escalated.
“If the bank does not provide a satisfactory resolution within thirty days, the customer can escalate the grievance to the bank’s Principal Nodal Officer or the RBI Ombudsman.”
There is also an online option.
“Complaints can be filed digitally through the RBI Complaint Management System portal to trigger an official investigation,” he said.
As demand for lockers rises and availability tightens, the way lockers are allotted is becoming just as important as their safety.
While rules are clear, the gap between policy and practice appears to be growing.
When access to something as basic as a bank locker starts depending on what else a customer is willing to buy, it raises a larger question, are lockers still a service, or are they slowly becoming a sales tool?