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NEO Banking - A Future Digital Banking, Development Scope, Threat and Challenges

What is Neo Banking? NEO banks are the banks which has no physical branches. NEO Banks are digital only financial institutions that operate exclusively online through websites and mobile apps.  The financial services industry has undergone massive transformations from manual to Core Banking and now digital without any physical branch. the evolution of banking has been marked by innovations aimed at making financial services more accessible, convenient, and efficient.   NEO Banks offers services like below: Account Management: Account Opening, Checking, Savings, and Money Transfers Loan Services: Quick and seamless loan approvals Low Fees: Minimal or no fees due to lower operational costs Tech Features: Budget tools, instant payments, and real-time alerts Why Are Neo Banks becoming popular now? Convenience : 24/7 mobile banking—no waiting in lines. Lower Fees : No hidden charges, free international transfers, and zero maintenance fees. User-Friendly Apps : Seamless, f...
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Retail Banking – > Lender’s Appraisal Procedure

Three major phases of loan origination –
Information Acquisition – Banks collect fees for processing, documentation and administration from customer.

Credit Appraisal and Sanction – Credit officer scrutinize the information made available to them and arrive at the loan eligibility and fix the terms and conditions to be offered to the customer. Two key techniques are used for this purpose. i) Confirming that the customer satisfies the basic norms an policies ii) By applying weighted risk based credit scoring

Disbursement – Either a cheque for the sanctioned amount is issued to the customer or the amount is transferred to the customer account. A repayment schedule stating the amortization is prepared for the customer.

  • ·         Both fixed rate loans and floating rate loans may be offered.
  • ·    The house/ flat should be insured against the risk of fire/ riots/ earthquake / lightening floods etc.
For More Related Topics Click on
Moratorium
Power of attorney
Equated Monthly Installment (EMI)
Check-off Facility
Loan Repayment through Post Dated Cheques (PDCs)

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