NEW DELHI: The Life Insurance Corporation of India, the country’s largest insurer, is working on a significant makeover that will include an overhaul of its lending operations, stronger corporate governance framework and a more modern sales force equipped to receive digital payments. A senior government official told ET that the insurer will soon appoint a banker to oversee its lending operations.

A standard operating procedure has also been worked out for repayment through one-time settlement scheme, or OTS.

At the end of March 2016, LIC had a debt portfolio of Rs 3.79 lakh crore, bigger than the loan portfolios of most banks. Its gross non performing assets stood at 3.76% at the end of March 2016, up from 3.30% a year earlier.

“We have taken some decisions to streamline the overall process. Preferably, a retired banker will be appointed to help the board in advising on the lending portfolio. Under the new leadership, LIC is making efforts to improve corporate governance,” the government official said.

Bringing expertise from the banking sector is expected to strengthen the insurer’s lending operations that involve offering loans to corporates.

The finance ministry has also nudged the insurer to give POS machines to its 20 lakh agents for premium collection. To start with, LIC is expected to give the machines to about 2 lakh agents.

“This is in sync with the government’s aim of strengthening digital payment infrastructure. The insurer will also set up a cyber security cell to monitor any deviation,” the official said. Around 90% of LIC’s premium is collected through its agents. An email sent to LIC did not elicit any response till the time of filing this story.

The company on Monday reported 12.81% year on year growth in its total assets at Rs 24.41lakh crore at the end of December 2016. It recorded 12.43% rise in total premium income at Rs 1.45 lakh crore during the nine months ended December 2016.

In the past year, corporate governance issues have haunted India’s largest insurer. The finance ministry had initiated a departmental enquiry against its former chairman SK Roy, allegedly over investments made by LIC in real estate firm Unitech in 2008-09.

Roy unexpectedly resigned in June, two years before the end of his term. He later requested the government to relieve him under the voluntary retirement scheme after realising that he stands to lose benefits including pension and other emoluments if he quit.

In 2011, the then chairman TS Vijayan was demoted as managing director amid allegations of irregularities. After being exonerated by the Central Bureau of Investigation (CBI) he was made head of India’s insurance regulator.

In 2016, the government appointed VK Sharma, an old guard at the insurer, as its chairman. “LIC is also a big institutional investor. It is paramount that they have set procedures. There were some issues which have now been addressed. The new chairman has been proactive in his approach,” said a finance ministry official, who did not wish to be quoted.