Bank locker loss? Why RBI rules have capped the compensation limit — Explained

Union Finance Minister Nirmala Sitharaman on Monday explained why the Reserve Bank of India (RBI) has capped the compensation limit of bank lockers to 100 times the annual locker rent in case of a loss or theft, saying that banking rules do not permit banks to see or record what customers store.

Sitharaman was replying to a supplementary question raised by Congress leader and MP from Gadchiroli–Chimur constituency, Namdeo Dasaram Kirsan, in the Lok Sabha during the Question Hour.

“Sitting and watching the disclosure of a client of what valuables he is going to keep in the locker is a breach of banking rules, and banks wouldn’t do that, so that cannot be a measure for me to decide whether there should be differential coverage,” the finance minister said.

Banks provide bank locker holders compensation fixed at 100 times the annual locker rent in case of loss, she explained.

“This limit exists because banks do not know or assess the contents of lockers, and asking customers to disclose valuables would violate banking confidentiality norms,” Sitharaman told the Lok Sabha.

Since item-wise valuation or insurance isn’t feasible, a standardised compensation framework is applied, the finance minister explained.

“Demanding differential coverage would require disclosure of contents, something banking rules don’t permit. At the moment, there is nothing before me for any other consideration,” she said.

Are bank lockers safe?

From a physical security perspective, bank lockers are tight. The RBI mandates CCTV surveillance—footage must be kept for 180 days—secure access control, fire-resistant vaults, and natural disaster readiness. But that doesn’t mean lockers are invincible.

If a locker is unused or uncontactable for seven years, the bank has the right to break it open and dispose of the contents after following strict procedures.

Customers are encouraged to nominate someone for easier succession. In case of the holder’s death, lockers are released to the nominee or legal heirs within 15 days, assuming proper documents are submitted.

India’s economic fundamentals strong: Sitharaman

Replying to another question on India’s economy, Nirmala Sitharaman noted that the country’s economic fundamentals are strong, and compared to other emerging market economies, the Indian rupee is “absolutely going fine” against the US dollar.

Since the commencement of the West Asia conflict on 28 February 2026, the rupee has depreciated by 4.1% to close at ₹94.82 per USD on 27 March 2026.

Replying to the supplementary question in the Lok Sabha on rupee depreciation, Sitharaman said, “India’s economy is strong, our fiscal situation is strong, and the entire world is praising our fiscal deficit management. Our forex reserves are solid.”

“Compared to other emerging economies, the rupee is doing fine (theek chal raha hai)… Absolutely going fine,” she added.

In a written reply, Sitharaman said the rupee depreciation is not specific to INR, as since the beginning of the West Asia conflict, major Asian currencies have also depreciated.

Certain peers, such as the South Korean Won, Thai Baht and Philippine Peso, have declined against the USD more than the rupee, by 4.%, 5.5% and 4.8%, respectively, she said.