Jewellery Goes Missing From The Locker: How Much Compensation Can the Bank Provide?

A recent incident in Bengaluru involving a bank locker has brought the topic of locker safety and bank liability into the spotlight. A woman believed that her gold and diamond jewellery had gone missing, only to find it later stored deep within the locker. 

While the incident ended without loss, it raised important questions about locker security, compensation policies, and customer responsibilities. 

This article discusses the key rules, rights, and responsibilities involved in operating a bank locker in India.

Laws Governing Bank Locker Facilities in India

Locker facilities in India function under the regulatory framework of the Reserve Bank of India, along with the operational rules of individual banks. In August 2021, the RBI issued updated directions to improve transparency and accountability.

Banks are not allowed to maintain an inventory of locker contents. They also have no authority to ask customers what is stored inside. However, if any item goes missing due to the bank’s negligence, the bank is liable to compensate the customer.

How Much Compensation Can the Bank Provide?

As per RBI’s revised guidelines, if the loss is proven to be a result of the bank’s negligence or failure in its security systems, the compensation can be up to 100 times the annual locker rent.

For instance, if your annual locker rent is ₹3,000, then the maximum compensation the bank can be required to pay is ₹3,00,000. This compensation is a fixed upper limit and not automatically guaranteed—it is contingent on proof of fault on the part of the bank.

Situations Where the Bank Is Not Liable

The bank will not pay compensation if there is no proof of its negligence. In cases where the theft or loss is not due to any error or lapse on the bank’s part, no compensation is provided.

This includes situations such as:

• The customer misplacing the locker key
   
• Accessing the locker without proper verification
   
• Locker tampering without any breach of bank protocol

In all such cases, the customer bears full responsibility for the loss.

What Steps Should You Take If Your Locker Is Tampered With?

If you suspect tampering or theft, take the following steps immediately:

• File an FIR with the police
   
• Submit a written complaint to the bank
   
• Request CCTV footage of the locker premises
   
• Escalate the matter to the RBI Banking Ombudsman if the response is not satisfactory

These steps help ensure a proper investigation and determine whether compensation is due.

General Guidelines for Bank Locker Usage

When you rent a locker, a formal agreement is signed between you and the bank. This document outlines the terms of access, rent, and responsibilities.

Key points include:

• The bank does not take any responsibility for what is kept inside
   
• You are the sole custodian of the locker’s contents
   
• You must follow the agreed terms for using the locker

Who Holds the Locker Keys?

Bank lockers operate with a dual-lock system. One key remains with the customer, and the second, a master key, is held by the bank.

The locker cannot be accessed unless both keys are used together. While this system implies shared responsibility, the bank must ensure that the overall security and access systems are secure and functional at all times.

Read More: PNB Appointed to Liquidate 32 Defunct Banks! 

Compensation in Case of Natural Disasters

In events such as fire, flood, or other natural calamities, the bank’s liability depends on the safety measures it had implemented beforehand.

If the bank had adequate systems like fire alarms, waterproof vaults, and regular inspections, it would not be liable for compensation. However, if damage occurs due to lack of basic safety infrastructure, the bank will be required to compensate for the loss of contents.

Are Locker Contents Automatically Insured?

No, the items kept inside a locker are not automatically insured by the bank. It is the customer’s responsibility to insure the valuables, if desired.

You can buy an insurance policy from a private provider that covers jewellery or important documents. Some policies also include coverage for items stored in a bank locker. However, banks do not facilitate this directly, nor is it included in your locker rent.

Conclusion

While bank lockers offer a secure facility to store your valuables, the onus of safeguarding what is kept inside primarily lies with the customer. The Reserve Bank of India has outlined clear rules on when a bank is liable and to what extent. Understanding these conditions can help you make informed decisions and take timely action if something goes wrong.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

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