Unmasking Safety Deposit Boxes, What they are and how they Work

During the week, officers from the Directorate of Criminal Investigation recovered what has been said to be fake currency from a safety deposit box in Barclays Bank, Queens Way Branch.

Immediately the contents were discovered, social media mercenaries went ballistic online asking how the bank could not know the contents of the safe deposit boxes for “all those years.”

As an economist, and as one of the safe deposit box owner in one of the commercial banks in Kenya, I couldn’t help but notice the widespread ignorance on safety deposit boxes, what they are and how they are operated.

For starters, a safe deposit box, also known as safety deposit box is a shelf, drawer or container, usually held within a larger safe or bank vault, in a post office or any other institution.

The safe deposit boxes are used by people, within or without the bank to store valuable possessions or documents that need safe keeping such as wills, academic certificates, precious metals, currency among other things.

As a customer, you can hire a safety deposit box (some banks call it a locker) of a different size, depending on the volume of something you want to be kept safe.

Something that many people is that a bank only hires the locker/safety deposit box to you but does not know and has no business in knowing what you are keeping or intend to keep. It is only you as the customer/locker hirer that knows what you want to keep.

The only thing a bank does is give the customer an indemnity form where one declares that the items to be kept are safe/legal and not firearms, proceeds of a crime or money laundering.

In most cases, when a customer places valuables in a safety deposit box or vault locker at a bank for safekeeping, you do so on a “contents unknown” basis, meaning that the bank doesn’t know what you’re storing.

The bank is not responsible for any loss of your property and the confidential nature of the service precludes the bank from knowing the contents of the boxes. If you have money in there, it has not been accepted by the bank and therefore is not in the bank’s books. This is why most safety deposit often insures their boxes against theft, accidents such as fires or any other tragedy that might cause damage to whatever is saved.

If a bank were to assume responsibility, it would insist on an accurate record being kept of the contents, and confirming the contents, at all times. Beats the whole logic of using such a facility and hence why customers are happy to safe keep at their own risks.

Banks are required to periodically update their locker customers’ KYC details under KYC, AML, CTF regulations. The definition of ‘Account’ in the PROCEEDS OF CRIME AND ANTI-MONEY LAUNDERING ACT includes a facility or arrangement for safety or fixed-term deposit box.

So, did Barclays Bank know what was in the safe deposit box? NO. Are they saying the truth when they say they had no idea whatsoever? Yes.