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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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Some Important Points from RBI Master Circular 2015 for AML-KYC certificate exam

·       *  Objective of KYC/AML/CFT guidelines is to prevent banks/FIs from being used intentionally or unintentionally, by criminal elements for money laundering or terrorist financing activities.
    
     *  Bank/FIs should frame their KYC policies incorporating the following four key elements –
o   Customer Acceptance Policy (CAP)
o   Customer Identification Procedure (CIP)
o   Monitoring of Transactions
o   Risk Management

  • Maintenance of KYC documents and Preservation of records
    • Maintenance of Records as per PML rules, 2005
      • All cash transactions of the value more than Rs. 10 lakh or its equivalent in foreign currency
      • Series of all cash transactions individually valued below 10 lakh or its equivalent in foreign currency done within a month and monthly aggregates which exceeds 10 lakhs or its equivalent in foreign currency.
      • All transactions involving receipt by NGO of value more than 10 lakhs or its equivalent in foreign currency.
      • All suspicious transactions whether or not in cash.
      • All cash transactions, where forged or counterfeit currency notes or bank notes have been used as genuine.
    • Preservation of Records
      • As per PML amendment Act 2012, banks/FIs should maintain at least 5 yrs from the date of transaction between bank/FI and client.
      • All the documents taken for identification from customer should be preserved for at least 5 yrs after the business relationship is ended.
      • Banks/FI may maintain record in soft or hard copy.

Reporting Requirement

 General Guidelines

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