State Bank of India (SBI), the country’s largest lender, is offering a personal loan of up to Rs 20 lakh to LIC employees to help them subscribe to the state-run life insurance giant's initial public offering (IPO), according to a report by The Economic Times. This loan product has been designed especially for LIC staff to invest in the ongoing IPO, according to the report.

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The subscription window for the mega IPO closes on May 9.

The government has reserved a portion of the mega IPO, or 1.58 million shares, for LIC employees.

At the end of the third day of the bidding process, the portion was oversubscribed three times, indicating a strong interest among the employees in the share sale.

Employees of the country’s largest insurer are getting a discount of Rs 45 per share on a price band of Rs 902-949 in the public offer.

According to LIC’s draft prospectus, the insurer has 1,14,498 employees.

Features of the loan

The personal loan will be available for a period of five years at a special interest rate of 7.10 percent per annum. Those who have worked with the insurer for a year or more are eligible to apply for the loan, according to the SBI website.

The bank has also waived the processing fee and prepayment penalty for the loan to LIC employees. To avail the loan, the LIC employee will not have to provide any security or guarantee.

How to apply

To apply for the loan, the employees can visit the SBI website or click here directly.

After this step, the user is required to fill in the required on the page. The bank asks for details such as name, email address, phone number, state and district name. After entering the details, the employee is required to enter the verification code and 'submit'.

How much can an employee invest?

According to the draft prospectus, LIC staffers can invest in the IPO under three categories: employee, policyholder and retail investor. An individual can make maximum bids up to Rs 2 lakh in the IPO. However, an LIC employee, who is also a retail investor and policyholder, can make a highest bid of Rs 6 lakh, which is Rs 2 lakh in each of the three categories, the report quoted a market expert as saying.