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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 - > Reverse Mortgage

Reverse mortgage is a loan scheme in which house owner of age 60 and above can avail the regular cash flow from bank by mortgaging his house if he is living in the same house.

The Reserve Bank of India has formulated the following guidelines for a reverse mortgage-

  • Maximum loan amount would be up to 60% of the value of the residential property.
  • Maximum tenure of the mortgage is 15 years and minimum is 10 years. Some banks are now also offering a maximum tenure of 20 years.
  • Option of monthly, quarterly, annual or lump sum loan payment.
  • Property revaluation to be undertaken by the lender once every 5 years.
  • Reverse mortgage interest rates could be either fixed or floating
  • It will not attract any tax

Criteria

  • House owners should be above the age of 60 years. If spouse is a co-applicant, then she should be above 58 years.
  • Owners of a self-acquired, self-occupied residential house or flat, located in India. The titles should be clear, indicating the prospective borrower's ownership of the property.
  • Property should be free from any encumbrances.
  • The life of the property should be of minimum 20 years.
  • Property should be the permanent primary residence of the individuals.

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