They are essentially digital banks that offer features and services similar to traditional banks.
Neobanks use technology and artificial intelligence to function.
They have not gained complete freedom in India because the RBI does not allow banks to be 100 percent digital.
How Neobank works in India?
Because they compete with India's traditional banks, Neobanks are also known as challenger banks. They make use of financial technology, also known as FinTech.
With the advent of digitalization, Neobanks in India have the potential to become the primary banking system.
Traditional Banks Vs Neobanks: Which is better?
In terms of services, both types of banks are efficient in their operations. In Fact, both types appear to complement one another.
According to a report, the number of Neobank customers in India has increased significantly, from approximately 7 million in 2018 to more than 20 million in 2019.
In that case, the Neobanks in India stand a good chance of taking over the country in the coming years.