RBI Draft Guidelines on Responsible Business Conduct

The Reserve Bank of India (RBI) has introduced draft guidelines aimed at preventing mis-selling of financial products by banks and other regulated entities. The guidelines, open for public comment, will be finalized and enacted from July 1, 2026.

Key Proposals

• Explicit Customer Consent:
  • Banks must obtain explicit consent from customers before offering financial products or services.
  • Compensation is required for any mis-selling incidents.
• Refund and Compensation:
  • Customers should receive a full refund if mis-selling is proven.
  • Compensation for any losses incurred due to mis-selling is mandatory.
• Advertising and Marketing Norms:
  • Guidelines cover advertising, marketing, and sales practices of financial products.
• Prohibition of Dark Patterns:
  • Banks are barred from using deceptive UI/UX designs that mislead or coerce customers.
  • User interfaces must undergo testing and audits to remove unfair features.
• Incentivization and Sales Practices:
  • Policies must not encourage mis-selling or incentivize employees/DSAs to push sales.
  • Employees should not receive direct or indirect incentives for marketing or selling third-party products.
• Product Bundling Restrictions:
  • Lenders should not bundle third-party products with their own.
  • Customers must have the option to purchase bundled products from different sources.
• Loan-based Purchase Restrictions:
  • Funding product or service purchases via loans requires explicit customer consent.