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Are you covered for loss of valuables if your bank locker gets looted?

In India, the government provides a cover of Rs 1,00,000 under the Deposit Insurance Credit Guarantee Scheme (DICGC).

November 14, 2017 / 03:20 PM IST

On Monday, robbers stole valuables from 27 lockers by digging a tunnel through an adjacent shop. According to reports, robbers dug a tunnel through a shop next door to enter locker room to steal jewellery and cash and then went back through the same route.

The incident came to light when a depositor wanted to check his valuables kept in the locker.

This is not the first time such a bank robbery has happened. But, the big question is what happens to your money or valuables if a bank is looted.

Here's the answer.

In India, the government provides a cover of Rs 1,00,000 under the Deposit Insurance Credit Guarantee Scheme (DICGC). In case of a robbery, the government ensures you receive this minimum amount as a compensation for your losses.


DICGC covers all public deposits like fixed deposits, recurring deposits and savings.

Read more: Great bank robberies: A quick look at big heists in the country

However, it is important to note that in case of a theft of bank lockers, banks are not responsible. This is simply because, at any point of time the bank remains oblivious to the contents of the locker. The customer is not required to provide any clarification on worth of cash and valuables placed in the locker.

Some banks though, do provide some compensation to their customers as a goodwill gesture considering locker break-ins highlight lapses in their security arrangements.

In a reply to an RTI, it was revealed that the public sector banks are not bound to give compensation for theft of valuables in safe or deposit boxes at their banks. The clarification noted the relationship between the bank and customers is like that of a landlord and lessee (tenant). This means that the lessee is responsible for his or her valuables kept in the locker.

The Reserve Bank of India guidelines say the banks are not responsible for the contents of the lockers. However, they are responsible to take precautions for protection of valuables.

According to Section 152 of the Indian Contract Act, a bank is not responsible for any loss or damage to the contents of a locker.

Banks can provide compensation in two cases - first where the customer can show proof of the belongings in the locker and second, if the customer can prove shortcoming on bank's part in terms of adequate security.

For example, in 2011 a branch of the State Bank of India in Uttar Pradesh was found guilty of 'laxity'. Termites had chewed their way through notes worth Rs 10 million. In this case, the bank was held responsible.

While banks do not provide insurance, the customers have options to avail policies from private players as bundled policies. For instance, valuable and jewellery insurance is generally available with home insurance policy.

These policies offer cover against accidental loss of damage to valuables not only at home, but anywhere in the world.
first published: Nov 14, 2017 03:20 pm

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