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Many people consider a bank locker to be the safest place to store their gold jewellery and other valuables. By paying an annual fee—often around ₹2,000—customers expect complete peace of mind and full protection against any loss. However, very few locker holders are aware of the actual rules laid down by the Reserve Bank of India (RBI) regarding liability and compensation in case of theft, fire, or other damage.

If gold or jewellery kept in a bank locker is stolen or destroyed, the bank does not automatically compensate the customer for the full value of the loss. In fact, the bank’s responsibility is limited and applies only under specific circumstances. Understanding these rules is essential for anyone who uses or plans to use a bank locker.

When Is the Bank Responsible for Loss?

According to RBI guidelines, a bank is liable to compensate the locker holder only in certain situations where the loss occurs due to the bank’s negligence or failure. These situations include:

• Fire in the bank premises

• Theft or robbery inside the bank

• Burglary or forced break-in

• Collapse of the building

• Fraud or wrongdoing by a bank employee

If jewellery is damaged or stolen due to any of these reasons, the bank has a legal obligation to pay compensation. However, this responsibility is not unlimited. The compensation amount is capped at a fixed multiple of the annual locker rent.

How Much Compensation Can You Get?

The RBI has clearly stated that the maximum compensation payable by a bank is limited to 100 times the annual locker rent.

For example, if your locker rent is ₹2,000 per year, the maximum compensation the bank can provide is:

₹2,000 × 100 = ₹2,00,000

This limit applies regardless of the actual value of the jewellery kept inside the locker. In today’s gold market, ₹2 lakh may not even be sufficient to replace a small necklace or a pair of bangles. For families who store their entire jewellery collection in a locker, the gap between the real value of the gold and the bank’s compensation can be extremely large.

This means that even if you lose gold worth ₹10 lakh or more, the bank will still pay only up to ₹2 lakh, provided the loss falls under the bank’s responsibility.

Situations Where the Bank Has No Liability

There are several situations in which the bank has no responsibility at all, even if the jewellery is completely destroyed. These include losses caused by:

• Floods

• Earthquakes

• Lightning

• Other natural disasters or acts of God

In such cases, the loss is treated as the customer’s own risk, and the bank is not required to pay any compensation.

Experts point out that most customers wrongly assume that a bank locker offers full insurance-like protection. In reality, the locker is only a storage facility, not an insured service.

Why Banks Do Not Insure Your Jewellery

Another important fact is that banks do not insure the contents of lockers. They are not allowed to offer insurance for locker contents either. The main reason is simple: banks do not know what is kept inside your locker.

Banks do not maintain any record of:

• What items are stored in the locker

• When jewellery is deposited

• When items are taken out

• The value of the contents

Since there is no inventory or declaration system, the bank cannot assess the risk or insure the contents. Legally, the responsibility of safeguarding and insuring the jewellery remains with the customer, not the bank.

What Should Locker Holders Do?

If you keep high-value gold jewellery in a bank locker, experts strongly recommend taking a separate jewellery insurance policy from a general insurance company. This can protect you against theft, fire, and certain disasters, depending on the policy terms.

It is also advisable to:

• Keep purchase bills and valuation certificates safely

• Get your jewellery periodically valued

• Read the locker agreement carefully

• Understand the compensation limits clearly

Final Takeaway

A bank locker offers physical security, but not full financial protection. The bank’s liability is limited to 100 times the annual locker rent and applies only in specific situations. For complete peace of mind, customers should not rely solely on the bank but should consider independent insurance for their valuable gold jewellery.

Knowing these rules in advance can help you avoid unpleasant surprises in case of an unfortunate incident.