New Delhi, June 16, 2026, 14:03 (IST).
- RBI’s new sales-conduct rules take effect on January 1, 2027.
- Banks must get clear, recorded consent before selling financial products or sending promotional offers.
- Proven mis-selling can lead to refunds, cancellation of the sale and compensation for customer losses.
The Reserve Bank of India has tightened how banks and other regulated lenders sell financial products, moving to curb a problem familiar to many borrowers: being pushed into insurance, credit cards, investment products or add-on services they did not clearly ask for. The RBI said its final amendment directions on advertising, marketing and sale of financial products will take effect from January 1, 2027, after stakeholder feedback on draft rules issued in February. The framework covers banks, NBFCs, housing finance companies and other regulated entities through separate amendment directions. Reserve Bank of India
The biggest change is consent. Banks must now get explicit, recorded approval for each product or service they sell, whether it is their own product or a third-party product such as insurance. Consent cannot be assumed through a pre-selected box or buried in fine print. The RBI’s commercial bank directions say the default choice on a digital consent screen must be No or I do not agree, and banks must disclose key features such as fees, interest rates, risks, lock-in conditions and exit penalties before a customer signs up. Reserve Bank of India
The rules also ban compulsory bundling, which means making one product conditional on buying another. That matters most in cases where borrowers are told they must buy a bank-linked insurance plan to get a loan approved. A bank may still require insurance as a genuine risk safeguard, but customers must be allowed to buy it from any provider, not just the bank’s preferred partner. India Today reported that the RBI move directly targets common complaints about borrowers being pushed into unwanted insurance and customers being nudged through banking apps into products they did not intend to buy. India Today
RBI has also barred dark patterns, meaning website or app design tricks that mislead users into taking actions they did not intend. Its examples include false urgency, auto-adding loan protection insurance during checkout, making cancellation hard to find, hiding processing fees until late in the process, disguising ads as account alerts and using confusing opt-out language. Banks and their direct selling agents will have to test and audit digital interfaces to remove these unfair features. Reserve Bank of India
Accountability is being widened beyond branch staff. Direct Selling Agents, Direct Marketing Agents, influencers, affiliates, loan service providers and other digital marketing intermediaries involved in customer acquisition can come under the sales-agent framework, with the regulated entity remaining responsible for their conduct. The Economic Times reported that third parties cannot pay incentives to employees of regulated entities for selling financial products, though banks and NBFCs may still incentivise their own staff, so long as incentive structures do not encourage aggressive sales or mis-selling. The Economic Times
For customers, the most practical part is the refund rule. If mis-selling is established, the bank must refund the amount paid for the financial product or service, intimate the customer about cancellation where applicable, and compensate for losses under its approved policy. Complaints can be filed within the timeline set by the relevant sector regulator; where no timeline exists, RBI’s directions allow a complaint within 30 days of receiving the signed terms and conditions. The test now shifts to implementation: banks have roughly six and a half months to rebuild consent flows, agent oversight, product-suitability checks and app design before the rules become enforceable. Reserve Bank of India
