The government of Nepal has made a new effort to start a neo bank service. The country’s federal regulatory bank, Nepal Rastra Bank (NRB), has mentioned the idea for a Neo Bank in its latest monetary policy for FY 2082/83.
In its policy, the bank has talked of conducting a study, policy, and developing a modality for the operation of a neo-bank. The idea was also announced in the budget for FY 2082/83. Now, the country’s central bank is officially making efforts on it.
What is a neo bank?
Neo bank refers to a banking practice in which everything is conducted online. From creating a new bank account to processing loans and using other banking services, everything is done electronically. Unlike in traditional banking, there is no paper or documents required or necessary in a neo bank. Everything is digital and online.
For its paperless and contactless banking, a neo-bank is also called a challenger bank.
Let’s now talk about it in Nepal’s banking context.
Check out: Digital Transaction Limit of Mobile Banking, Internet Banking, and Wallets in Nepal
Online services have laid the foundation for neo-banking
Many Nepali banks have shifted their operations online. From creating a new bank account to mobile banking, internet banking, and video KYC, banks are going digital. This minimizes overhead costs while also providing customers more value and convenience. Nabil Bank’s nbank web is a good example of ana neo bank in Nepal. The online shift is also laying a strong foundation for neo-banking practices.
The challenge is to ensure safety, cybersecurity, familiarity with this innovative practice, etc. Neo banks could play a vital role in promoting entrepreneurship and financial inclusion in Nepal.
Banking services have covered all 753 local levels in Nepal. Now, it’s time neo bank to take banking a generation further.