Banks cannot see or record what valuables customers store in lockers, as it would lead to a breach of banking regulations, Finance Minister Nirmala Sitharaman said according to PTI, ruling out differential insurance coverage based on contents.
“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,” she said, according to PTI.
Sitharaman rules out differential insurance for bank lockers
The statement came when FM Sitharaman was replying to a supplementary question raised by Congress leader and MP from Gadchirolia-Chimur constituency, Namdeo Dasaram Kirsan, in the Lok Sabha.
The finance minister further said the standard coverage for locker holders is fixed at 100 times the annual locker rent in case of any loss. This is because banks cannot inspect or evaluate the contents of lockers, making it impractical to provide insurance based on actual value, she added.
“For each one of them (lockers) separately, it is not possible, so it is decided that 100 times is what is given for any loss if there is a loss, if there is a locker breaking loss or something like that. At the moment, there is nothing before me for any other consideration,” she explained.
Finance Minister Highlights IBC’s Role in NPAs Recovery
In the Lok Sabha, finance minister also spoke on amending the Insolvency and Bankruptcy Code (IBC). She said that IBC has been a main and very crucial factor in improving the health of the country’s banking sector, including recovery of non-performing assets.
The Bill has proposed 12 amendments to the IBC, which came into force in 2016. Sitharaman added that more than half of the NPAs (Non-Performing Assets) have been recovered by the banks through the resolution process.
With the inputs from PTI