The Reserve Bank of India (RBI) has unveiled draft guidelines aimed at reforming how banks market, sell and advertise financial products and services to customers. The proposed rules are designed to protect consumers from mis-selling, prevent unwanted calls, ban harmful incentives, and improve transparency in financial product promotion. Public feedback on the draft is invited until March 4, 2026, and the final norms are expected to take effect from July 1, 2026.
Proposed Restrictions on Sales Incentives
Under the draft “Advertising, Marketing and Sales of Financial Products and Services by Regulated Entities” directions, the RBI has proposed that banks must ensure their policies do not create incentives that lead to mis-selling. This applies to internal reward structures, sales competitions, and bonuses that pressure employees or direct sales agents (DSAs) to push products solely to meet targets. Specifically, the draft states that no incentive — direct or indirect — should be received by bank staffers from third parties for selling their products.
Consent and Calling Rules
Another key element of the draft is that banks must contact customers only after obtaining explicit consent and restrict such calls to regular office hours (typically 9 am to 6 pm). This measure is targeting the growing concern among customers about unsolicited and late-night sales calls from bank agents or third-party vendors.
Ban on Bundling Third-Party Products
The RBI draft outlines a strict ban on compulsorily bundling third-party financial products (like insurance or mutual funds) with a bank’s own products. Customers must be given clear options to choose products from different providers without any forced combination. Also, banks should not market third-party products as their own.
Refunds and Compensation for Mis-Selling
If mis-selling is established — either due to misleading advice or inappropriate product recommendations — banks will be required to refund the full amount paid by the customer and compensate for any resultant losses as per an approved policy. These provisions aim to strengthen customer protection and deter unethical sales practices.
Dark Patterns and Digital Interfaces
The draft also specifically prohibits the use of “dark patterns” — deceptive design features in digital platforms that manipulate users into actions they did not intend, such as creating false urgency or hiding opt-outs. Banks will need to audit and redesign digital experiences to ensure fairness and transparency.
Suitability and Feedback Mechanisms
Banks are expected to assess whether a product is suitable for the customer based on factors such as age, income, financial literacy, and risk tolerance before recommending it. The draft also requires mechanisms to seek customer feedback within 30 days of any sale to ensure customers understand product features and risks.
Public Feedback and Implementation
The RBI has invited comments from the public on the draft guidelines until March 4, 2026. Once finalized, these rules are likely to be implemented from July 1, 2026, heralding significant changes in how banks engage customers and sell financial offerings.
