Are Your Valuables Safe in a Bank Locker? What Happens When a Fire Breaks Out

Yesterday, a major fire broke out at a UCO bank branch on MG Road, Benagluru. Although there are no reports about the extent of the damage caused, those with bank lockers at the facility must have concerns over the state of their valuables.

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Are bank lockers the safest place for your valuables?

In 2017, the RBI and 19 public sector banks responded to a right to information (RTI) query which among other things stated that “banks have no liability for loss of valuables in lockers.”

Thus, in the event of a robbery, fire or natural calamity, you should not expect any compensation from the banks since the locker hiring agreement exempts them of all liability.

Even private banks aren’t better off. For one leading private bank, the locker hiring agreement states:

“The Bank shall not be responsible or liable for any loss or deterioration of or damage to the contents of the Locker whether caused by rain, fire, flood, earthquake, lightning, civil commotion, war, riot or any other cause/s not in the control of the Bank and shall also not be liable or responsible for any loss, sustained by the Hirer/s by leaving any articles outside the locker.

While the Bank will exercise all such normal precautions as it may in its absolute discretion deem fit, does not accept liability or responsibility of any loss or damage whatever sustained to items deposited in the Locker. Accordingly, the Hirer/s are advised in their own interest to insure any items of value deposited in the Locker with the Bank.”

There are two key things to note:

1) You pay a certain amount annually ranging from Rs 1,000 to Rs 10,000 per annum depending on the size of your locker and bank. By paying them, you seek to ensure the security of these lockers.

However, according to the banks, they are not liable because the relationship between them and locker holders is one of landlord and tenant. In other words, the lessee is responsible for his or her valuables kept in the locker. Unless there is negligence on the part of bank officials or you can show proof of belongings in the locker, they aren’t liable.

2) Having said that, the National Consumer Redressal Commission (NCDRC) has on multiple occasions, held banks responsible for loss due to theft or damage to lockers. If you feel hard done by a bank with regards to your locker, you must approach the NCDRC.

However, receiving compensation and going through all that litigation is a money-draining and lengthy process.

Instead, there are a couple of things you can do:

1) Read the terms and conditions very carefully before you hire a bank locker, and carefully document all the items you want to deposit in the locker.

The latter is critical in the event of robbery, fire or any such activity because now you have a record of the value of your contents and thus can claim compensation.

2) Insure your valuables.

“While banks do not provide insurance, the customers have options to avail policies from private players as bundled policies. For instance, valuable and jewellery insurance is generally available with a home insurance policy. These policies offer cover against accidental loss or damage to valuables not only at home but anywhere in the world,” says this Moneycontrol explainer.

“Bankers generally take a Banker’s Indemnity Package policy, which covers money, securities both in transit and premises and building from fire and allied perils. As per the RBI, however, banks, in any case, will not be responsible for the contents kept in a locker by the hirer. When you put your belongings in a locker, the bank generally unaware of the contents and cannot provide insurance protection. However, some private banks are providing insurance for jewellery items put inside the lockers subject to the terms and conditions. With rising demand, we may see the arrival of some products which may provide insurance to bank lockers subject to particular declarations and terms,” says Rajiv Kumar, MD & CEO, Universal Sompo General Insurance, speaking to the Financial Express.

Fortunately, for customers today, a few general insurance companies have taken it upon themselves this year to launch their own ‘Bank Locker Protector Policy’ which offers cover against a range of risks including burglary, fire, natural calamity, cheating by bank staff or an act of terrorism.

Also Read: Banks Cannot Charge You For These ATM Transactions: Rules You Must Know!

If you want to be doubly sure about your valuables, you’d be wise to look at these policies up at the very least.

At the end of the day, bank lockers are still largely safer than the confines of your homes for keeping your valuables. As a customer, all you need to do is be smart about how you deposit your valuables in them.

(Edited by Gayatri Mishra)

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