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Radhika Menon

Loans would be made available against savings instantly

Mumbai , Jan. 6

You may soon be able to get an instant loan against your LIC policy. All you need to do is log on to the Internet and mail your application. LIC will be able to process the application on-line and credit the loan amount to your bank account in a matter of few hours.

This will be possible with LIC converting all policy documents into electronic format. More than 50 per cent of the LIC policyholders take loans against savings-based insurance plans.

Digitising Documents

LIC is investing over Rs 600 crore on an "Electronic Document Management System" that will digitise all policy documents. "Policyholders will be able to access their own documents on-line and use them for any purpose. This will also make it easy for policyholders to visit any branch and make a change in the nomination or other official modifications," said Mr Thomas Mathew, Managing Director, LIC.

The system will finally turn LIC into a paper-free office. LIC has given the contract for this to a consortium led by Hewlett Packard. The project is expected to take off in two months. "This is a huge project since all the documents of more than 19 crore policies have to be scanned. Since each LIC branch has over 2 lakh policies, the entire project will take around 4 years to be completed," said Mr Mathew.

LIC's has been spending a lot of money on IT. This year the corporation has earmarked Rs 360 crore, up from last year's Rs 275 crore. Information technology has been a crucial tool in LIC's strategy for holding on to its market share. Almost all of the corporation's 2,048 branches are networked. "LIC got networked long before the PSU banks started working on a core banking solution," said Mr Mathew.

Large Volumes

In 2005, LIC introduced satellite offices which allows policyholders to pay their premium anywhere in India. The corporation has around 94 satellite offices, which will be increased to 105 this fiscal. Next year, the number of offices will be 200, Mr Mathew estimates.

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