Government have instructed and permitted the
Director of Insurance to collect the interest on loan sanctioned to the policyholder
soon after the loan in question is liquidated. Based on these orders of the Director of
Insurance had revised the loan deduction order in which the Drawing and
Disbursing officers are being asked to calculate interest on the loan soon after
liquidation of loan at the rate given and recover the same from the loan
The Director of Insurance has stated that as per
their records and data it is found that most of the Drawing and Disbursing officers
are recovering the principal amount only and no interest is being calculated and
recovered from the pay of loaness. As a result the interest due from the policy
holders is being recovered from the refundable amount at the lime of their claims or
it is being adjusted in the subsequent loans. This is causing strain to the Life
Insurance Fund and the Accountant Generals Audit party also has raised an
objection to this system. Hence, to avoid audit objections in future and to save the
fund from such strain, the Director of Insurance, has requested to accord permission
to calculate the expected amount of interest due at the time of sanction of loan itself
and inform the same to the concerned Drawing and Disbursing Officers duly
requesting him to recover the same along with principal. The E.M.I will be consisting
of both the principal and interest, any difference if arises it can be adjusted in
subsequent loan or at the time of settlement of claim.
Government after careful examination of the proposal of the Director of
Insurance, Telangana State, Hyderabad hereby accord permission to calculate the
expected amount of simple interest on diminishing balance method at the time of
sanction of loan itself, fix the E.M.I., and inform the same to the concerned Drawing
and Disbursing Officers duly requesting them to recover the same which will be
consisting of principal and interest. The Director of Insurance shall see that any
excess or less amount of interest so recovered is accounted and adjusted at the time
of subsequent loan or settlement of claim
The Director of Insurance, Telangana State, Hyderabad shall take necessary
action in the matter accordingly
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