Bank lockers offer limited protection for valuables. The RBI limits bank liability for loss from theft or fire to 100 times the annual locker rent, a sum often far below the gold's actual value.
With gold prices soaring, experts advise caution for those who rely solely on bank lockers to store their jewelry. The Reserve Bank of India (RBI) has set a clear limit on the security and compensation provided by banks for items stored in lockers. In the event of theft or fire, the bank does not compensate based on the value of the gold stored in the locker.
According to RBI rules, the bank is only liable in situations such as fire, theft, fraud by bank employees, or building collapse. However, this compensation is limited to only 100 times the annual rent of the locker. For example, if you pay Rs 2,000 as annual locker rent, the maximum amount you can receive from the bank in case of an accident is only Rs 2 lakh. According to current market prices, even the price of two sovereigns of gold is more than this. For those who store gold worth lakhs, this amount will be negligible.
No responsibility for natural disasters. The RBI clarifies that the bank will have no responsibility if the items in the locker are damaged due to natural calamities like floods, earthquakes, and lightning. The bank is also not responsible for losses caused by the customer's negligence. Banks do not provide insurance cover for items in the locker. This is because the bank does not know what is kept inside the locker. Therefore, it is the customer's responsibility to insure the gold.
Solutions:
Special Insurance: You can take special policies for jewelry from general insurance companies.
Home Insurance Add-on: The most cost-effective way is to add extra cover for jewelry when taking out home insurance. This provides security both when the gold is in the bank locker and when it is being worn.
Gold Overdraft: A New Way
Financial experts point out that it is safer to use the overdraft facility by pledging gold at the bank instead of a locker. In this case, the bank takes responsibility for the full value of the gold. A special feature is that you only need to withdraw money when needed and pay interest only on the amount withdrawn. However, this method may not be practical for those who need to use inherited jewelry frequently.
Experts suggest that ensuring insurance corresponding to the value of the gold along with the locker rent is the safest option in the current situation.
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