The Banking Continuum: A Comparative Study of Legacy, Digital - First, and Neobanking Models in the Indian Banking Scenario

The Indian banking sector is undergoing a transformative evolution, shifting from traditional brick-and-mortar institutions to digitally enabled platforms and fully digital neobanks. This paper presents a comprehensive comparative analysis of three dominant banking models operating in India: legacy (traditional) banks, digital-first banks, and neobanks. Utilizing a mixed-methods approach combining secondary data analysis, policy review, and industry reports, the study evaluates these models across dimensions such as technological integration, customer experience, regulatory compliance, operational efficiency, financial inclusion, and competitive positioning. The emergence of digital-first and neobanking entities signifies a disruptive shift, driven by fintech innovation, regulatory support, and changing customer expectations. However, legacy banks continue to exert significant influence due to their extensive branch networks and trust capital. Findings suggest that while neobanks offer superior agility and user experience, their scalability is constrained by regulatory limitations and lack of full banking licenses. The paper concludes with policy recommendations and strategic insights for stakeholders aiming to navigate the evolving banking continuum in India.