Thank you gentlemen for some noteworthy replies.
My position in this hypothetical debate was as follows:
When armed conflicts are imminent, the bank has the responsibility to secure the gold even if it means removal to another country (for safe keeping) - because (as has been correctly stated by Arnab) the gold belongs to the borrower.
IF this gold is lost in the event of the bank being ransacked (which can happen) during or after the conflict, the bank would be responsible (liable) for the loss of the gold. And, in the case of 'ornaments' and other items of personal value, the $ value of liability could be immeasurable.
It was also the borrower's responsibility to repay the loan. Until such time, the bank would be right to "Hold" the gold as security.
Do I make sense?