MUMBAI: Within days of announcing to come out with a stricter direction to curb the rising menace of mis-selling of financial products, mostly insurance and mutual funds, the Reserve Bank has issued a draft direction proposing tighter norms on marketing and sale of financial products, and also banning their bundling by banks, dark patterns apart from mandating explicit customer consent.
The draft ‘Responsible business conduct amendment directions, 2026, issued Wednesday, sets out detailed norms on advertising, marketing and sale of financial products and services by banks.
The draft also defines mis-selling to include unsuitable sales, misleading information and sale without explicit consent. It also defines compulsory bundling, while clarifying that voluntary or complimentary product packages are excluded.
The draft directions, which will come into force from July 1, 2026, will apply to commercial banks, excluding small finance banks, payment banks, regional rural banks and local area banks, the central bank said Wednesday.
Under the proposal, banks must frame a comprehensive policy governing the sale of their own as well as third-party financial products which should address suitability and appropriateness of products, customer feedback mechanisms and compensation in cases of mis-selling.
The RBI draft has also defined direct selling agents (DSAs) and direct marketing agents (DMAs) engaged in selling own or third-party products. Banks will now be required to maintain and publish an updated list of such agents on their websites. Agents operating within bank premises must be clearly distinguishable from bank employees.
Products and services may be sold only with explicit customer consent, says the draft, adding consent for multiple products cannot be clubbed together.
Banks will now be prohibited from bundling third-party products with their own offerings or marketing third-party products as their own. Promotional material must be clear and factual, with full disclosure of fees, charges and interest rates.
Sales calls and visits will be allowed only between 9 am and 6 pm, unless specifically authorised by the customer. Banks are also barred from deploying “dark patterns” on user interfaces and must conduct user testing and periodic internal audits to identify and eliminate such practices.
Additionally, banks must seek customer feedback within 30 days of a product sale. In cases where mis-selling is established, banks will be required to refund the amount paid and compensate customers.