Statement 1 is correct: Neo-banks are digital-first financial technology (FinTech) companies that operate exclusively online or through mobile apps, offering banking services without traditional physical branches. Statement 2 is incorrect: In India, pure neo-banks typically do not hold their own banking licence. Instead, they partner with traditional, licensed banks to offer banking services to customers. The banking activities are conducted under the license of the partner bank. Statement 3 is correct: Neo-banks, through partnerships with licensed banks, offer a range of banking services, including savings accounts, small loans, debit cards, credit cards, fund transfers, and various payment solutions.
Consider the following statements regarding “Neo Banks” sometimes seen in news. 1. Neo banks are financial institutions with only an online presence and function digitally. 2. Neo banks have to apply for a banking licence with RBI. 3. Neo banks offer banking services like savings accounts, small loans and debit cards. Which of the above statements is/are correct?
Asked in GPSC Prelims CSP 2 2023 · Topic: Money & Banking (Non-Banking Financial Companies (NBFCs): Types, Regulation, and Significance)
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