Current Affairs · Banking Regulations
Safe Deposit Locker services are a significant ancillary function where the relationship between the bank and the customer is often debated in legal forums. Following the comprehensive review of regulations by the regulator, the liability of banks in case of loss of locker contents due to fire, theft, or fraud by bank employees has been strictly defined. What is the maximum liability a bank carries for such losses relative to the prevailing annual rent of the locker as per the RBI Master Direction?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The bank is not liable for any loss as it does not have knowledge of the contents and the relationship is of a landlord and a tenant.
- 2The bank is liable for an amount equivalent to one hundred times the prevailing annual rent of the safe deposit locker.✓
- 3The bank must compensate the customer for the full value of the contents as declared by the customer at the time of locker hiring.
- 4The bank liability is capped at ten thousand rupees for small lockers and fifty thousand rupees for large lockers regardless of the rent.
Correct answer
The bank is liable for an amount equivalent to one hundred times the prevailing annual rent of the safe deposit locker.
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