Bank lockers have emerged as the most popular medium to store valuable goods like jewellery. They are considered to be the safest place to store valuable jewellery, important documents and other precious items.
Banks charge anything between Rs 1,000 and Rs 10,000 to operate such lockers. In some cases, these charges are waived off if you place a fixed deposit with the bank.
Lockers are considered a better option than home safes because banks take necessary action to safeguard your valuables, like a secure infrastructure at the strong room, restricted and CCTV-monitored entry and exit, security guards, electronic surveillance, etc.
Once you keep jewellery with the bank in a locker you sleep without any worry of loss.
However, god forbid if something goes amiss — like an accident, burglary, infidelity of staff, loss to the strong room due to any act of terrorism or natural calamity, you may lose your valuables.
Now here comes the shocker!
As per the Reserve Bank of India’s guidelines mentioned in the year 2017, ‘banks have no liability for loss of valuables in lockers’. It clearly states that during any mishap like bank robbery, sudden fire or any natural calamity banks are not liable to pay their customers any compensation.
The locker agreement itself does not mention any liability payment. Therefore, it is the sole responsibility of the customers to take care of their valuable items and they would have to bear such loss.
Not surprising if you go, ‘what the hell’! But think about it from a bank’s perspective. Do you inform the bank what you have kept inside the locker? The answer is ‘no’. There could be some unscrupulous elements who may claim they have kept a fortune inside their lockers while they might not have kept anything of value. How does the bank verify this? It could face significant claims.
Further, if the bank starts documenting and asking people to disclose their belongings kept in lockers, it hampers privacy. Many customers would be hesitant to make such declarations due to the fear of income tax, etc authorities.
It would also increase the bank’s costs, as even if customers agree to declare what they have kept inside lockers, its staff would need to vet it and take the help of valuers to ascertain the worth of jewellery (22 carat/24 carat, etc.)
So what is the option before customers?
Well, they can opt for an insurance policy to cover unexpected losses and mitigate this risk. Banks do not provide any locker insurance to their customers. Some private players can help customers with such insurance policies.
Such Bank Locker Protector Policies protect the customer from losses in the contents of a bank locker such as jewelry and other valuables. These policies also have add-on covers to insure important documents kept in a bank locker.
The policy covers loss or damage of the contents of bank locker in the event of accidents, burglaries, holdups, infidelity of bank staff, acts of terrorism. It can also cover at an additional premium: share and stock certificates, deposit receipts, insurance policies, title deeds, plans & manuscripts, passport and other personal records and certificates.
The Gold insurance policy offers a sum insured from Rs 2 lakh to Rs 50 lakh and above. The premium charges of the insurance covers depends on the amount of gold you want to keep inside the locker. The premium charges are also nominal. For an insured sum of Rs 10 lakh of valuables, the premium is likely to be around Rs 1,000 plus GST in a city like Mumbai.
If due to the negligence of banks and their officials, a customer suffers loss of valuable items inside the locker, then it is the duty of the bank to pay the compensation.
If the bank refuses to pay the compensation, then the customer can approach the National Consumer Redressal Commission). However, this is a long and difficult process.
Early this year, the Supreme Court directed the Reserve Bank to lay down regulations within six months mandating the steps to be taken by banks with respect to locker facility management.
The court held that banks cannot wash their hands of their responsibilities towards customers operating lockers.
The court made these observations on an appeal filed by a Kolkata native, Amitabha Dasgupta, against an order of the National Consumer Disputes Redressal Commission.
The RBI has another month or so to finalise the same. Do watch out for this judgement as well.
However, the court may fix liability only in case of negligence by banks. A blanket liability is not possible due to practical considerations and reasons mentioned above.
To sum up, banks are still safe to keep your gold, but be aware of the risks of keeping your valuable items in lockers. You can mitigate the risks by buying insurance.