In almost every city and town of India, bank locker is considered to be the most impenetrable place to keep ancestral wedding jewellery, gold coins and important property documents safe. Common customers assume that their life savings are completely safe under the surveillance of bank's strong concrete walls, heavy iron doors and CCTV cameras as compared to the cupboards at home. But if someday a big robbery takes place in the bank, a tunnel is burgled or the jewelery is made missing by breaking the lock of your locker with the connivance of the bank employees, will the bank return every penny of the jewelery to you? The intuitive answer for most account holders is 'yes', while the actual legal position and official rules of the Reserve Bank of India (RBI) are quite the opposite. The simple and accurate answer is that if jewelery is stolen from a bank locker, the bank never pays you the full market value of your jewellery. Under the statutory rules of the Reserve Bank, banks neither provide insurance for the contents of the locker nor are they legally bound to compensate 100 per cent of the loss of undisclosed property. To control this entire process, a special formula of the Central Bank works, which is necessary for every locker holder to understand closely. RBI's 100 times compensation formula: How much money will the bank get in case of theft? Following the landmark directions of the Supreme Court, the Reserve Bank of India had implemented revised guidelines regarding bank locker management. Under these rules, banks are not allowed to shirk their primary security responsibilities. If the contents of the locker are damaged due to theft, robbery, burglary, fire, building collapse or fraud or gross negligence by the bank employees within the bank premises, the bank cannot shirk its responsibility. However, here the financial liability of the bank is not unlimited. As per RBI rules, the maximum liability of the bank in case of any such untoward incident will be limited to only 100 times the current annual locker rent of that locker. This can be understood with an easy mathematical example. Suppose you use a medium-sized locker at a local bank branch in Delhi, Mumbai, Lucknow, Patna or Jaipur with an annual rent of Rs 2,500. If a massive theft occurs in that branch and gold-diamond jewelery worth Rs 50 lakh goes missing from your locker, then the bank is legally liable to compensate you only: 2,500 × 100 = Rs 2,50,000 (Rs 2.5 lakh). The remaining direct loss of Rs 47.5 lakh will be entirely borne by the customer. Similarly, if the annual rent for your locker is Rs 1,500, the bank will give a maximum of Rs 1.5 lakh, even if gold worth Rs 5 crore is kept inside the locker. The bank is not obliged to pay even Rs 1 more than the limit of 100 times the fare. Bank's liability becomes zero in case of natural disaster or 'Act of God'. If the reason for theft or loss is a natural calamity, then the bank's liability becomes zero. It is clearly mentioned in the official manual of RBI that the bank will not be liable to pay any kind of compensation for disasters falling under the category of 'Act of God'. If the bank's branch gets damaged due to severe earthquake, flood, lightning, cyclonic storm, cloud burst or any unexpected military conflict or riots and the locker is destroyed due to water logging in the strong room or falling of debris, then the bank will not pay a single rupee compensation to the customer. The rule makes it clear that if the bank had taken ordinary and reasonable precautionary measures for the security of its premises, the entire financial risk of loss due to natural or forceful calamities would be borne by the locker holder himself. Legal relationship between bank and customer: Why does the bank not know what is kept in the locker? Often this question arises in the minds of customers that when banks make property insurance mandatory while giving home loan or car loan, then why do they not insure the jewelery kept in the locker themselves? The basic principle of banking law and financial confidentiality of the customer works behind this. Legally, the relationship between the bank and the locker holder is like 'Lessor and Lessee' and not like 'Bailor and Bailee'. When you keep any item in a bank locker, no bank official has the legal right to see or ask what you have kept inside. The locker has two different keys – one is the master key which is with the bank manager and the other is the customer key which is only with the customer. The locker opens only when both the keys are pressed together, after which the bank employee goes out of the cabin. Since the bank does not have any official inventory or certified value of the contents of the locker, no general insurance company can provide bulk insurance to unknown assets without pre-verification and declared value. The bank merely rents the safe room space and does not become the legal custodian of the contents kept inside. Surefire Ways to Ensure 100% Refund of Your Precious Jewelery If you want to provide 100% financial protection to your gold and silver jewelery kept in a bank locker, instead of relying on the bank, you have to take proactive financial steps yourself: Take a Standalone Bank Locker Insurance Policy: The country's leading non-life insurance companies (General Insurance Companies) now offer special 'Bank Locker Insurance Cover' or Home Insurance Provides 'Locker Valuables Add-on' under. While taking this policy, you have to attach the valuation certificate and hallmark bill of your jewelery from a Government Approved Valuer. If you have taken a sum insured of Rs 40 lakh or Rs 60 lakh, then in case of any untoward incident, the insurance company pays the entire assessed amount. Keep Hallmarked Bills and Digital Photographs Safe: Whenever you buy new jewellery, keep the certified GST invoice, Hallmarking Unique Identification (HUID) number and clear color photographs with you separately in a secure cloud drive or pen drive. Create a Locker Inventory Diary: Whenever you put new jewelery in the locker or remove it for a home function, be sure to record the date, type and weight of the jewelery in your personal diary. This document provides a solid basis for police investigation and your claim before the consumer court in case of any dispute. Strict security rights given to customers by the new RBI rules To curb the arbitrariness of banks and make the security mechanism transparent, the Reserve Bank has set several mandatory operational standards for every public, private and rural bank branch: Instant SMS and Email Notification: Whenever your locker is opened or closed, it is mandatory for the bank to send an SMS alert to your registered mobile number and email address at the same instant. If you have not opened the locker and the message is received, the bank and police can be alerted immediately. Mandatory CCTV footage of 180 days: It is mandatory to have high capacity night-vision CCTV cameras installed at the entry and exit points of the bank's strong rooms and locker areas. The bank management will have to keep the backup of this CCTV footage safe for at least 180 days (6 months), so that the evidence is not destroyed in the investigation of any theft or tampering. Transparent Waiting List: No bank branch can arbitrarily deny a locker to a local citizen on the grounds that the lockers are not vacant. Each branch has to maintain a transparent waitlist for locker allotment and issue its token number to the customer. What legal action should be taken immediately if jewelery is stolen from the locker? If unfortunately an incident of robbery, burglary or locker breaking happens in your bank branch, instead of panicking, immediately adopt concrete legal procedure: First of all, immediately submit a formal written complaint to the branch manager and keep the receiving copy of that letter with the bank's seal and signature. Immediately lodge an FIR under relevant sections of the Indian Code of Justice (BNS) at the concerned local police station and obtain a certified copy of the FIR. Get the bank management to issue a formal legal notice to safeguard the CCTV recording, strong room log-book and locker access register of the day of the incident. If the bank is reluctant to admit its security lapse or delays in paying 100 times rent compensation, you can lodge an online complaint on the Banking Ombudsman portal of RBI within 30 days. Additionally, a complaint can be filed in the District or State Consumer Disputes Redressal Commission on the grounds of gross negligence in service (Deficiency in Service). Indian consumer courts have also given landmark judgments in many cases, awarding huge damages for actual loss and mental torture to the victims, going beyond the limit of 100 times, when banks' security lapses were exposed.
