Ways to reduce your risk when bank doesn't compensate for theft from locker

Prudence over choice of bank, a detailed item inventory are a few of the ways

If you expect your bank to compensate you for losses in case of theft or burglary from your locker, you may be in for a shock. Banks are not liable to compensate you for such losses. This was revealed in an RTI (Right to Information) response by the Reserve Bank of India and several public sector banks. Banks have contended that as far as the locker service goes, their relationship is that of a lessor (one who leases space) and lessee, and the latter alone is responsible for the safety of contents in such a relationship. Since banks will not compensate customers for losses, the onus is on customers to take steps that will reduce their risks.

First, be prudent in your choice of bank. Opt for one that is located in a central and well-populated area. Recently, there was an incident in North India wherein robbers broke into a bank located adjacent to an abandoned factory.

Before depositing your valuables in a locker, make a detailed inventory of all the items. "If the total cost of valuables kept in a single locker is very high, consider splitting it between two banks. Visit the bank locker every three-six months and check the contents," says Rohit Shah, founder and chief executive officer, Getting You Rich.

Only gold that is going to be worn should be kept as jewellery. "Any gold holdings meant purely for investment should be kept in the form of a financial product, such as a sovereign gold bond, e-gold, or gold exchange traded fund (ETF), thereby eliminating any security risk" adds Shah. For older people, one option is to distribute the jewellery they own to their heirs as part of estate planning, instead of holding it all in one locker.

After hearing this news (that banks won't compensate you for loss of valuables kept in lockers), some people may decide to keep a part of their jewellery holdings at home. In that case, get it insured. "Jewellery kept at home can be easily insured. All you have to do is declare it, get a valuation certificate, and it will be insured under the home insurance policy," says Arvind Laddha, deputy chief executive officer, JLT Independent Insurance Brokers. Bear in mind that jewellery kept in a bank locker is not insured. "This is because the bank doesn't know what contents you have kept in the locker, so it can't compensate you," adds Laddha.     

Besides jewellery, people also store important documents in their lockers. These should be digitised and kept in e-lockers. Doing so will enable you to demonstrate ownership even if the physical document gets lost.