Banks can neither resort to dark patterns such as fake countdown timers to force quick decisions nor include additional items such as products/services, payments to charity or donation at the time of checkout from a platform, without the consent of the user
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The RBI on Wednesday issued comprehensive draft instructions on advertising, marketing and sales of financial products and services for banks to prevent mis-selling and compulsory bundling of financial products. Further, to ensure customers understood the financial product they bought, banks will have to seek customer feedback within 30 days of sale, per the Draft Reserve Bank of India (Commercial Banks – Responsible Business Conduct) Amendment Directions, 2026, which will come into effect on July 1.
If mis-selling is established, banks have to refund the entire amount paid by the customer for purchase of the product/service. They have to also compensate customers for any loss arising due to mis-selling. Before a financial product/service is marketed/sold to a particular customer, its suitability and appropriateness for the customer should be determined by the bank.
This will be based on an analysis of the features, risk-return attributes, time horizon, complexity, fee structure vis-à-vis the customer’s age, income, level of financial literacy and risk tolerance. Banks have to ensure that their policies and practices neither create incentives for mis-selling nor encourage employees / DSAs (Direct Selling Agents) to push the sale of products / services.
Also, banks can neither resort to dark patterns such as fake countdown timers to force quick decisions nor include additional items such as products/services, payments to charity or donation at the time of checkout from a platform, without the consent of the user.
Banks have been made accountable for third parties they engage with. For the benefit of customers, any agent of the bank, or representative of a third party, who is present within the bank’s premises for the sale of the bank’s own or third-party product/service, should be distinguishable from the employees of the bank, including clear on person identification.
code of conduct
A bank, based on the instructions mentioned in these Directions, shall put in place a code of conduct for marketing and sales of financial products/services, which shall be applicable to the bank’s own employees as well as DSAs / DMAs (direct marketing agents).
Meanwhile, the central bank said a bank can only deal with regulated financial products and services in which a bank is permitted to deal with. A bank may, at its option, act as an insurance broker departmentally, subject to the conditions. per Draft Reserve Bank of India (Commercial Banks – Undertaking of Financial Services) Amendment Directions, 2026, which will come into effect from April 1.
Banks may undertake agency business on fee basis without any risk participation. This shall be explicitly disclosed upfront to the customers. They have to ensure that the third-party product and service providers (TPPSP), whose products are being sold, have robust customer grievance redressal arrangements in place. The bank may facilitate the redressal of grievances.
Banks may refer their customers to a TPPSP only for regulated financial products and services (except insurance) subject to the conditions.
They may collect only a one-time fee from the TPPSP at the point of referring its customers. No other stream of income/ fee, or commission in any form should be collected by the bank under the referral arrangement.
Published on February 11, 2026
