Home / Insurance / News /  Customers to now bear MDR charges for postal life insurance
Listen to this article

If you are holding a postal life insurance (PLI) policy or rural postal life insurance policy (RPLI), you will now have to bear the merchant discount rate (MDR) charges while paying insurance premiums online. The Department of Posts has issued an office memorandum to this effect on 18 January.

According to the notification, "No MDR shall be paid by the Government portal to the Authorized Acquirer Bank and their PGs/PGAs." The customer/cardholder would pay all MDR charges, and the necessary orders are being implemented for PLI/RPLI online premium payment transactions, it added.

MDR is a charge that a merchant is charged by their issuing financial institution for accepting payments from their customers through credit card, net banking and debit cards.

Generally, a customer who is an employee of the State and Central Governments, State and Central Public Sector Undertakings, Government of India aided Educational Institutions, Universities, Local Bodies, Nationalised Banks, joint ventures having a minimum of 10% Govt./PSU stake, credit cooperative societies, and staff members of the Defense services and Paramilitary forces can buy or hold a Postal Life Insurance policy.

The scheme was introduced on 1 February 1884. Over the years, PLI has grown substantially from a few hundred policies in 1884 to more than 46 lakh policies as of 31 March 2017.

Besides, the Rural Postal Life Insurance was introduced on 24 March 1995 for rural people of India. The Malhotra Committee had observed in 1993 that only 22% of the insurable population in this country had been insured; life insurance funds accounted for only 10% of the gross household savings. The Government accepted the recommendations of the Malhotra Committee and allowed Postal Life Insurance to extend its coverage to the rural areas to transact life insurance business, mainly because of the vast network of Post Offices in the rural areas and low cost of operations.

The prime objective of the scheme is to provide insurance cover to the rural public in general to benefit weaker sections and women workers of rural areas in particular and spread insurance awareness among the rural population.

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.
Recommended For You
Edit Profile
Get alerts on WhatsApp
Set Preferences My ReadsFeedbackRedeem a Gift CardLogout