There are several fintech platforms, which are also known as Neobanks, are making inroads in India, all thanks to the raging COVID-19 pandemic that forced people to stay inside and do digital banking. The constant need to visit banks for the services has drastically gone down.
To those who don’t understand the term ‘Neobank’, let’s decode it for them. Neobanks are basically made so that people can perform banking tasks without physical branches and their partnerships with other small banks allow them to give higher interest rates on savings accounts.
Neobank doesn’t belong to any such categories of banks under the Reserve Bank of India (RBI) rules. These firms offer services such as instant loans, savings accounts, mutual funds, credit cards and fixed deposits. They provide these services by tying ups with several RBI-licensed small banks. Neobanks also offers wealth management services and get investment adviser licenses.
Essentially being tech platforms, these banks come with good apps as the whole idea of banking is without physical branches, a trend that has grown huge during the pandemic. There are a few neobanks that helps in analysing and tracking your spending. Besides that, the tie-ups with the small banks help in offering attractive interest rates on savings accounts. One Neobank can easily tie up with multiple regulated banks, thus providing a bouquet of products from several providers like savings accounts and forex transfers.
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