
Neo banks are fully digital financial institutions that operate without any physical branches. Unlike traditional banks, they provide banking services entirely through mobile apps or online platforms.
These banks are designed to serve the needs of the tech-savvy population by offering convenient, fast, and cost-effective services like digital payments, lending, and money transfers.
Although neo banks do not hold banking licenses in India—due to current RBI regulations—they partner with licensed traditional banks to provide financial products and services.
While the partner bank handles the funds and regulatory compliance, the neo bank focuses on customer experience, product distribution, and technology-driven services.
This setup allows them to keep costs low by eliminating expenses related to branch operations and physical infrastructure.
Neo banks stand out for their user-friendly interfaces, quick account setup, and efficient service delivery. However, since they are not recognized as official banks by the RBI, customers should be cautious and aware of the risks.
These include limited product offerings, potential cybersecurity threats, and the absence of in-person support.
Despite these concerns, neo banks are gaining traction in India for offering modern, personalized financial solutions that traditional banks may not always provide as seamlessly.
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