Banks have no liability for locker theft; how to protect your valuables
Mumbai: For all those who are sitting peacefully at home, having deposited their jewellery and other valuables in their bank lockers, think again. Responding to an RTI, the RBI declared on Sunday that banks have no liability for loss of valuables in lockers.
According to the response obtained by the lawyer who had filed the RTI, the unanimous reason given by the 19 banks was that that "the relationship they have with customers with regard to lockers is that of lessee (landlord) and lessor (tenant)". This nature of this relationship implies that the lessor is responsible for his or her valuables kept in the locker which is owned by the bank.
The common clause in all locker hiring agreements states, "As per safe deposit memorandum of hiring locker, the bank will not be responsible for any loss or damage of the contents kept in the safe deposit vault as a result of any act of war or civil disorder or theft or burglary and the contents will be kept by the hirer at his or her sole risk and responsibility”.
According to an article in the Financial Express, locker hiring agreements of private sector banks is also similar in nature and takes no responsibility of the valuables stored in their lockers.
Banks therefore shrug off this responsibility despite charging customers for this service. Bank lockers in metro cities are charged from Rs 1,000 per annum to Rs 10,000 depending on the size of the locker. Despite shelling out so much from their pockets, if a basic safety or compensation is not guaranteed, how will a person get their peace of mind?
Move the National Consumer Redressal Commission (NCDRC)
People turn to bank lockers because they do not want to lose their sleep over safety of valuables kept at home. Therefore, banks are liable to compensate customers in case of any losses incurred by them. According to Ashish Kapur, CEO, Invest Shoppe India Ltd “This position of responsibility of the banks for the lockers leased by them has been upheld by various courts as well as the National Consumer Redressal Commission (NCDRC) in several cases. Hence if the bank declines to compensate a customer for any loss due to theft or damage to his locker, he or she should approach NCDRC”.
However, it must be mentioned that this is an exhausting and expensive affair.
A thorough reading of the locker hiring agreement
It is important to understand the terms and conditions of the hiring agreement. Moreover, one should always make a list of the things they are putting in the locker and calculate the worth of the valuables. According to Atul Surana, Certified Financial Planner, Catalyst Financial Planning, this comes in handy while claiming compensations. Moreover, he suggests that one should open the locker only after the accompanying bank employee has left and ensure it is locked well before leaving.
Insuring one’s valuables
Jewellery insurance covers are usually offered by general insurance companies. According to Rajiv Kumar, MD & CEO, Universal Sompo General Insurance, some private banks offer insurance for jewellery items put inside the lockers subject to the terms and conditions.
There are also some homeowner’s policies that provide coverage to valuables in bank lockers. Valuables may also be kept in home lockers and insured. These householder’s policies offer coverage against accidental loss or damage to jewellery or valuables not only at home, but also while one is on the move, anywhere in the world.
According to the Financial Express, the rates for such policies is around Rs 1,000 per lakh of sum (of valuables) insured and in multiples. There are various limits, from Rs 2 lakh to Rs 10 lakh. “The customer has to give details of the jewellery, such as type, weight and replacement cost up to items of Rs 10 lakh. However, if the replacement cost of the jewellery is above Rs 10 lakh, the customer is required to submit a valuation certificate at the time of purchasing home insurance,” says Surana.
One should also look up the coverage limit for jewellery under home insurance policies. Companies like ICICI Lombard and Tata AIA General, apply a sub-limit for jewellery under the home insurance policy. For examples, if one has opted for a policy of Rs 3-lakh, then only 25 per cent or jewellery worth Rs 75,000 would be covered under the policy. Moreover, the policy insurer can be notified about any big gold purchase made and the protection offered can be extended.
