Lifeline Account

Posted in Finance, Accounting and Economics Terms, Total Reads: 724

Definition: Lifeline Account

Lifeline account is a facility which is made for giving financial services to individuals having very little income. The basic criteria is that their would be no fees charged nor would there be a requirement to keep a certain sum to keep the service active.

Large banks are entitled to provide this service to the underprivileged in terms of income. The whole idea is to make the banking institution and financial services available to everyone, irrespective of their income or financial status.

Governments across the world encourage lifeline accounts to attract savings from its citizens, who can also utilize the basic banking facilities. However, in certain cases, the bank may charge a fee for online transactions, e-banking etc.

Example: Pradhan Mantri Jan Dhan Yojana in India.

PMJDY is a national mission for the financial inclusion launched by the Prime Minister of India, to ensure the access to the financial services mainly banking, deposits & savings accounts, credit, remittance, pension & insurance in an affordable manner. These accounts can be opened at any bank branch or a business correspondent like bank-mitra outlet. PMJDY accounts are being opened with zero balance. However, if the account holder wishes to get a cheque book then he will have to fulfill the minimum balance criteria.

Hence, this concludes the definition of Lifeline Account along with its overview.

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