Consider the following statements regarding Neo-Banks:
1. Neo-banks are digital banks without any physical branches.
2. In India, they need a bank license of their own to operate and offer licensed services.
3. They are basically the online-only subsidiary of an established and regulated player in the banking sector.
4. RBI doesn’t allow banks to be 100% digital yet.
How many of the above statements are correct?
Explanation:
Correct Option: (b) Explanation: Statement 1 is correct: Neo-banks are online-only fi nancial technology ( fi ntech) companies that operate solely digitally or via mobile apps. Simply put, neo-banks are digital banks without any physical branches. Statement 2 is incorrect: in India, Neobanks don’t have a bank licence of their own but rely on bank partners to offer licensed services. Statement 3 is incorrect: Neobanks entered the fi nancial system with the tag of ‘challenger banks’ because they challenged the complex infrastructure and client onboarding process of traditional banks. Statement 4 is correct: RBI doesn’t allow banks to be 100% digital yet.