With gold prices climbing sharply, customers who store jewellery in bank lockers are being advised to reassess whether their valuables are adequately protected. Under Reserve Bank of India (RBI) rules, a bank’s liability for loss of locker contents is limited, and in many cases may fall far short of the actual value of gold stored.
As per RBI guidelines, banks are liable for losses arising from incidents such as fire, theft, burglary, building collapse or fraud by bank employees only up to 100 times the annual locker rent. For example, if a customer pays ₹2,000 a year as locker rent, the bank’s maximum liability would be ₹2 lakh, an amount that may not even cover a small quantity of gold jewellery at current market prices.
The central bank has also made it clear that banks bear no responsibility for losses caused by natural calamities such as floods, earthquakes, lightning or other “acts of God”. In such cases, the entire risk rests with the customer, although banks are expected to take reasonable care to protect their premises.
Banks do not insure the contents of lockers, as they do not maintain any record of what customers store inside. RBI rules explicitly state that banks cannot offer, directly or indirectly, any insurance product for locker contents. As a result, customers must arrange separate insurance cover on their own if they wish to protect high-value items like gold jewellery.
Financial experts point out that simply paying higher locker rent does not improve protection, given the liability cap. They suggest that customers consider alternative options such as specialised insurance policies or gold-backed financial products. One such option is a gold overdraft facility, which allows individuals to deposit jewellery securely with a lender while accessing funds against its value, paying interest only on the amount used.
With the value of household gold rising steadily, experts say it is important for locker holders to review existing arrangements and ensure their valuables are protected beyond the limited safeguards offered by bank lockers.