MUMBAI, November 2: First it was the safe locker robbery in a Delhi bank about a year ago and then, more recently, the much talked about CRB scam.

The two incidents made one realise the risk involved in depositing cash with NBFCs and keeping personal assets such as jewellery with banks.

As a reaction to the second incident--the CRB fiasco--came the demand for compulsory deposit insurance for non-banking finance companies (NBFCs). The Reserve Bank of India (RBI) even constituted a committee, called the K S Shere Committee, to study whether deposit insurance is needed.

Bank locker security, however, continues to be a grey area with no concrete step being taken to ensure it.

On being contacted, RBI has stated that the issue of deposit insurance doesn't come under its purview. Rather, it's administered by the Deposit Insurance & Credit Guarantee Corporation of India (DICGCI) and covered by the Deposit Insurance & Credit Guarantee Corporation Act, 1961.

But safe deposit lockers come under a contract and are not part of the Deposit Insurance Act, says a source in DICGCI. Banks provide safe deposit locker facilities under a contract with the customer, he adds. Here's how he explains it: ``The contract between the customer and the bank is signed only with regard to offering the facility for providing safe deposit lockers. The contract does not include insurance of the articles kept in the lockers as locker operations are conducted by customers in the utmost privacy and the banker does not even keep an inventory of the articles kept/withdrawn from the lockers by the customers.''

So, at present, the scenario is like this: No insurance cover for deposits made with NBFCs, but a panel has been formed to look into the matter. Bank lockers are not covered by any Deposit Insurance Act. In the case of registered insured banks, insurance cover is provided by DICGC for deposits of up to Rs 1 lakh per bank per depositor.

But what about the safety of deposits of more than Rs 1 lakh value in the registered banks? In other words, what is the fate of a depositor's money (more than Rs 1 lakh) after theft, robbery or any other damage to the bank? According to the Deposit Insurance Act, the deposit insurance scheme is applicable only in the case of winding up, liquidation or amalgamation, etc, of a registered insured bank. ``As such, theft, robbery and other damages are beyond the purview of the scheme.''

This being the case in India, let's take a look at the trends overseas in relation to insurance deposit. In the US, Federal Deposit Insurance Corporation insures commercial bank, savings and loan deposits of value up to $100,000. In the UK, deposit insurance is restricted to 75 per cent of a bank deposit, with a maximum payment of Pound 15,000.

Each country follows its own norm in deposit insurance. While it is compulsory for a specified class of institutions to have deposit insurance in most countries, there are exceptions, too. For instance, in places such as Luxembourg, Spain and Belgium, deposit insurance is voluntary.