Bank Locker Rule: How much compensation will a bank provide if jewellery worth ₹50 lakh kept in a locker goes missing?
Most people rent bank lockers to keep their valuables, jewelry, and gold or silver items safe. Banks charge a fee for providing this security; however, what happens if your precious jewelry is stolen from the bank or goes missing? Are banks held liable for such items, and what kind of compensation can one expect? It is essential to understand the relevant rules before opting for a bank locker.
Under the guarantee norms applicable to bank lockers, there is insurance coverage of up to ₹5 lakh in the event of the loss or theft of deposited items or valuables. But, if your jewelry is of high value, are banks obligated to cover its full worth? A case of this nature emerged in Delhi, where a woman named Monica held a joint locker at Union Bank of India with her father-in-law. She had stored jewelry worth approximately ₹47 lakh in it. In September 2018, when she went to retrieve the items, she found the locker empty, and the bank could not provide a satisfactory explanation.
Victory after an 8-year battle
The woman did not give up after her belongings went missing from the bank locker; instead, she filed a complaint against the bank. A legal battle ensued between the bank and the customer, lasting eight years, which ultimately concluded in the customer's favor. In their ruling, Justice Sangita Dhingra Sehgal, President of the Delhi State Consumer Disputes Redressal Commission, and member Bimla Kumari stated that the bank had failed to properly manage the customer's locker account and had also failed to ensure the safety of the jewelry—valued at ₹47 lakh—stored within it. Consequently, the bank was ordered to reimburse the full value of the jewelry, along with 18% annual interest. Additionally, the bank was directed to pay ₹1 lakh for mental agony and ₹50,000 toward litigation costs.
Rules regarding bank lockers
Bank lockers are governed by the regulations set by the Reserve Bank of India (RBI). If items kept in a locker are stolen or lost, and it is determined that the bank was entirely negligent, the bank may be required to pay compensation of up to 100 times the annual locker fee. This means that if you have stored gold worth ₹50 lakh in a bank locker—for which you pay an annual fee of ₹5,000—the bank would be liable to pay compensation of up to 100 times that fee (i.e., ₹5 lakh) in the event the gold goes missing, rather than the full ₹50 lakh. However, if the matter reaches a consumer court, the bank could potentially be ordered to pay the entire amount, depending on the court's ruling—as was the case for Monica, a resident of Delhi.
Rules regarding bank accounts
For bank accounts—such as savings accounts, fixed deposits (FDs), and recurring deposits (RDs)—insurance coverage of up to ₹5 lakh is provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC). This implies that regardless of the total amount you may have in your accounts or FDs, the bank is only liable to pay up to ₹5 lakh in the event of loss or disappearance of those funds. Consequently, in both cases—whether it concerns items in a locker or funds in an account—the bank is not liable for the full value in the event of a loss.
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