Page 30 - Banking Finance March 2023

ARTICLE

registered bank. Neo banking currently does not offer of India issued a circular in 2019 that permits fin-tech
several loan and deposit options. According to the companies to enter the Indian banking business in a limited
expansion, acceptance, and openness of neo banking, ecosystem using the idea of neo banks.
they still need to be developed.
A way forward
d) Safety and Security: The security of the customer's
money is one of their top worries when making an online The RBI, SEBI, and IRDAI are largely responsible for
or mobile purchase. Neo banking is obviously very regulating the financial sector in India. These regulators have
secure and is governed by a local regulatory put out a number of initiatives and rules to improve,
organisation. The degree of assurance and awareness standardise, streamline, and ensure the safety of access to
among the client's needs to be raised. financial goods through digital channels. The enormous work
done in, it is admirable that all regulators strive to update
Neo banking Future in India: their rules to reflect the constantly evolving technical
advancements and innovations in the financial sector. For
The banking industry's future lies with Neo Bank. In order
instance, the Regulatory Sandbox programme that all
to deliver hassle-free transactions, Neo Bank is introducing
regulators launched in recent years allows them to test
a lot of new user data with an intuitive interface. The Neo
innovative goods and services in real time within a
Bank will also assist in raising money and putting it in the
regulatory framework. In the current environment,
right accounts so that the government can effectively
initiatives like Video KYC, the creation of the Reserve Bank
monitor it. Neo Bank focuses on MSMEs because they are
Innovation Hub, and the implementation of the Account
concerned with national development at the lowest possible
Aggregator architecture are equally noteworthy. Future
cost. Because most neo banks also let customers to file their
forecasts predict that the already-expanding neobanking
GST returns and other indirect taxes, they can be a good
sector will expand quickly if the regulators maintain their
banking alternative for quick payment and collection
proactive attitude.
processes as well as for tax compliance.
But because the industry is still developing, it is crucial that
India is one of the top countries with a significant potential
laws progress steadily with it. The neobanking industry is
for digital payments, according to the Digital Evolution
anticipated to stabilise with new business models and
Index. We can create a society without cash, which is
products in a few years, and Indian authorities, like their
something that is necessary. To transition from a cash
international counterparts, may consider actively regulating
economy to one with less cash is the goal. Revolt unveiled
neobanks.
intentions to provide Neo banking services in India, at one
stage estimated to be worth $33 billion. The Reserve Bank
Conclusion
The concept of banking without banks and banks without
branches is growing more and more popular as the world
becomes more technologically aware and moves closer to
full digitization. Neo banks are the best approach to do that
as of recent years. Neo banks, which are virtually existent,
operate on the internet, collaborate with banks, and offer
the majority of financial services at extremely low costs.
Customers are able to get banking services right from their
location as they become more knowledgeable about
computers and technology. People that have enough
education, such as those in industrialised countries, are
attempting to get used to this new technology. People in
the USA, the UK, Australia, and other countries see this new
technology as a way to avoid travelling to various areas to
do their business. And as a result, neo banking has grown
more rapidly in western nations than in Asian ones.

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