LIC to accept debit cards at cash counters
The insurance behemoth ropes in Axis Bank for conducting a trial run before implementing the system
Ritu (name changed) is an LIC policyholder and stays in a rented accommodation in Delhi to pursue her career in journalism. She is not fond of using plastic money and usually deals in cash. Forget about paying LIC premiums, after demonetisation, she finds it troublesome to withdraw enough cash ev­en to meet her daily expenses and pay her landlord, who flatly refused to accept rent of Rs 20,000 in any other mode to avoid paying taxes.
“I avoid using my debit card in making payments as I dislike plastic money. However, I have no option but to use the card now due to cash withdrawal limits and the hassle of standing in queues for ATM withdrawals,” said Ritu.
“In the current scenario, it would be good if LIC starts accepting debit cards along with cash at its counters,” she said when asked about the mode of paying her life insurance premium.
Though large numbers of the policyholders have debit and credit cards, till now they can't use it at LIC cash counters as it does not have electronic point of sale (ePoS) machines. This traditional practice of accepting cash has limited several policyholders from paying premium in large amounts as the banks have withdrawal limits of only Rs 24,000 per week after the demonetisation move taken on November 8, 2016.
However, following prime minister Narendra Modi’s call to make India a less-cash society, the country’s largest life insurer Life Insurance Corporation of India has in principle decided to accept debit cards for collection of renewal premium at cash counters of its branches.
LIC credit card partner Axis Bank has been roped in for conducting a trial run before implementing the system. The finance and accounts division of the insurance behemoth has asked the zonal manager of western zone to identify some branches under Mumbai division on the basis of their existing association with Axis Bank as well as competence of the branch officials for the purpose. Guidelines to modify the software programmes at cash counters to make it compatible to accept debit card has also been issued.
The step will ease the problem of policyholders, who doesn’t have chequebooks and are facing problem in withdrawing cash due to the withdrawal limits at ATMs.
Moreover, use of debit cards will eliminate the chances of cheque bounce and the associated problems thereafter.
“Once a cheque is bounced, the policyholder will not have options to re-issue a cheque or pay online and have to deposit premium either in cash or through demand draft. Moreover, apart from banks, LIC also charges Rs 125 for cheque bounce. So, introduction of debit card will ease the premium payment process as transfer through debit card is as good as paying cash,” said B N Pathak, a CM Club level agent with LIC. “However, policyholders use to hand over premium cheques to agents to get it deposited at LIC branches, which they can’t do in case of debit cards and have to visit the branches in person,” he added.
Since demonetisation, online premium payments have gone up manyfold, resulting in recurring server failures due to heavy pressure on the network. LIC officials said overload on payment gateway is causing problems that had led to stalling of plastic card payment at crowded bars and restaurants on weekends during the first few weeks of demonetisation.
Earlier, the corporation had extended the grace period for policyholders for payment of renewal premium in the wake of the note-ban.
Amitava Chakrabarty