Bank locker rules: What banks are liable for and what you must insure yourself

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Using a bank locker still feels like the safest way to store jewellery and important documents, yet the rules in 2025 make it clear that banks are offering secure space, not full insurance. RBI’s revised locker framework, implemented from January 2022 and now embedded in banks’ new agreements, standardises how liability, rent and compensation are handled – and also underlines how much risk still stays with you.

Under RBI’s instructions, banks must use a standard locker agreement, maintain proper security, keep CCTV and access logs, send alerts when lockers are operated and ensure a clear waitlist and transparent allotment. If contents are lost because of the bank’s negligence or failure to protect the vault – for example, fraud by staff, theft, burglary, fire or building collapse where the bank is at fault – the bank’s financial liability is capped at up to 100 times the prevailing annual rent of that locker.

That means if your annual rent is Rs 5,000, the maximum compensation, even in a proven negligence case, is about Rs 5 lakh. Anything above that remains your risk. Banks also make it clear they are not responsible for losses caused purely by “acts of God”, such as floods or earthquakes, where there is no negligence on their part, and customers are barred from storing illegal or hazardous items.

Locker rent is charged annually in advance and varies by bank, locker size and branch location, with metro branches generally the most expensive. On top of rent, banks typically levy a one-time registration fee, overdue rent charges, fees for extra visits beyond a free quota, and break-open charges if you lose the key or stop paying rent. Some banks continue to follow RBI’s permission to take a fixed deposit that roughly covers three years’ rent plus break-open costs, especially for new customers.

Another change that matters in 2025 is documentation. Banks have spent the past couple of years getting customers to sign revised locker agreements; if you haven’t signed, you risk the locker being sealed or access being restricted until you comply.

The critical fine print is that banks do not insure what you keep inside. Even if the locker is at a top-tier branch and fully compliant with RBI norms, the compensation cap and exclusions mean high-value jewellery, bullion or heirlooms may be only partially protected. Mainstream personal finance coverage and recent legal guides repeatedly stress that a locker is a secure storage facility, not an insurance product, and that customers should consider separate “locker contents” or valuables insurance if their holdings are worth more than the 100-times-rent cap.

In practical terms, that means keeping an itemised list with photos and valuation reports, updating it regularly, and using it to buy a standalone policy for jewellery and other movable assets, whether stored at home or in a locker. That is often the only way to close the gap between the legal liability of the bank and the actual value of your possessions.

FAQs

No. Banks are not allowed to ask for a detailed inventory and specifically state that locker contents are not insured by them. They only accept limited liability, up to 100 times the annual rent, and only when loss arises from negligence or specified events such as theft or building collapse.

From a physical security perspective, a locker is usually safer than keeping it at home. Financially, however, if your rent is Rs 5,000 a year, the maximum bank liability in a negligence case is about Rs 5 lakh, leaving a large exposed gap. A separate valuables or locker-contents policy is advisable if the value you store is significantly higher than the liability cap.

If rent remains unpaid for a prolonged period, or if the locker stays inoperative and the bank cannot contact you, the bank can eventually break open the locker after due notice and deal with the contents as per its policy and law. Recent coverage also shows banks warning that lockers may be sealed or access curtailed if customers do not sign the updated RBI-mandated agreements within the deadlines.