(a) whether the rate of interest on car-loan is 6-7 percent while interest rate on loan
on one`s LIC policies is 9-10 percent;
(b) if so, the reasons for this disparity in the interest rates;
(c) whether the Government proposes to take say measure to reduce the rate of interest
on loan on LIC policies;
(d) if so, the details thereof; and
(e) if not, the details of future plans of the Government in this regards?
MINISTER OF THE STATE IN THE MINISTRY OF FINANCE (SHRI PAWAN KUMAR BANSAL)
(a): The Life Insurance Corporation of India (LIC) lias reported that it provides car loans
only to its officers at 5% for loan, upto Rs. 1 lakh and 9% for loan beyond Rs. 1 lakh. The
rate of interest on loan against insurance policies is 9% per annum payable half yearly.
(b): The car loan at concessional interest rate to LIC officers is given as a part of Employees
Benefit Scheme. On the other hand loan against policies, involves additional operational costs
which raises the interest charged.
(c): As reported by LIC, there is no proposal as of now to reduce the rate of interest on
loan on LIC policies.
(d) & (e): Do not arise.