UK's Barclays has challenged the British competition commission's planned ban on the sale of payment protection insurance, which is scheduled to come into force in 2010.

Companies often sell PPI along with unsecured loans to provide a cover for reimbursements in case the borrower loses his/her job or become unable to work. Consumer groups have been criticizing PPI for a long time. They claim that PPI has been mis-sold to many customers as a default option alongside the loan, when it should be considered as a separate product.

Single premium PPI proved to be expensive as the cost of the cover was subject to interest as it was included in the loan.

Earlier in May, Competition Commission put a ban on the sale of PPI alongside a loan.

Speaking on the issue, a spokeswoman for Barclays said that the ban was not justified by the evidence which has been provided.

Lloyds Banking Group along with Shop Direct Group Financial Services is backing Barclays. It is note worthy here that Government possesses around 43 per cent stake in Lloyds Banking Group.