Digital transformation in Indian banking: UPI, e-KYC, and Neobanks

Author(s)	Jash Hemal Parekh
Country	India
Abstract	India’s banking landscape has undergone a rapid digital transformation over the past decade, driven by large-scale public digital infrastructure (UPI), identity and onboarding innovations (Aadhaar-based e-KYC and paperless e-KYC), and the rise of technology-first challengers commonly called neobanks. This paper synthesises recent data (2024–2025), policy shifts, industry developments, and academic/industry literature to evaluate how these three pillars interact to improve payment efficiency, expand financial inclusion, and create regulatory and operational challenges. Key findings: UPI continues to scale to record monthly volumes and values, Aadhaar e-KYC remains central to low-friction customer onboarding, and neobanks are proliferating but face evolving RBI directions that balance innovation with consumer protection. The paper concludes with policy recommendations to strengthen data privacy, interoperability, cyber resilience, and sustainable business models for digital banking services.
Keywords	UPI, e-KYC, Aadhaar, neobanks, digital payments, RBI, financial inclusion, India
Field	Mathematics > Economy / Commerce
Published In	Volume 7, Issue 6, November-December 2025
Published On	2025-11-28
DOI	https://doi.org/10.36948/ijfmr.2025.v07i06.61745
Short DOI	https://doi.org/hbdr7v

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