The Licence Reality
In India, only RBI-licensed entities can hold customer deposits. Most "neo-banks" — Fi, Jupiter, Niyo, Slice — operate on the banking infrastructure of licensed partners (Federal Bank, YES Bank, IDFC FIRST Bank) while providing the front-end UX.
What Changed in 2026
RBI's differentiated banking licence framework, which would have allowed fintech-first entities to hold restricted deposits, remains under deliberation. Until it is finalized, all deposit-taking must go through licensed bank partners. This means your money at Fi is at Federal Bank — Fi is the interface, not the insurer.
Why This Matters
If a neo-bank app shuts down (as several smaller players have), your deposits are held by the partner bank and remain protected under DICGC insurance (up to ₹5 lakh per bank per depositor). The risk is in the app's value-added products — credit, investments, insurance — which may have different counterparties.