The Reserve Bank of India (RBI) has issued the Reserve Bank of India (Commercial Banks – Responsible Business Conduct) Second Amendment Directions, 2026, introducing a comprehensive framework governing the advertising, marketing, and sale of financial products and services by commercial banks. The new directions aim to enhance customer protection, prevent mis-selling, improve transparency, and promote ethical business practices across the banking sector. The amendments will come into effect from January 1, 2027.
The revised framework applies to all commercial banks except Small Finance Banks, Payments Banks, Regional Rural Banks, and Local Area Banks. It consolidates and expands existing instructions on customer appropriateness and suitability while introducing several new definitions and compliance requirements. Key concepts such as compulsory bundling, dark patterns, explicit consent, mis-selling, Direct Selling Agents (DSAs), Direct Marketing Agents (DMAs), and third-party products and services have now been formally defined.
A major feature of the amendment is the introduction of a dedicated section on the advertising, marketing, and sale of financial products and services. Banks are required to establish comprehensive policies covering:
- Product suitability assessments
- Customer compensation mechanisms
- Feedback systems
- Governance arrangements for DSAs and DMAs
Banks must also maintain publicly accessible lists of their empanelled marketing agents and ensure that such agents meet prescribed qualification and certification requirements.
The directions place significant emphasis on customer consent and transparency. Financial products and services may only be sold with explicit customer consent obtained through documented and verifiable means. Banks must clearly disclose key product features, charges, risks, lock-in conditions, and exit terms before obtaining consent. User interfaces must be designed to prevent customers from inadvertently agreeing to products or services, with the default consent option set to “No” or “I do not agree.”
To address concerns regarding unfair sales practices, the RBI has introduced detailed measures to prevent mis-selling. Banks are prohibited from compulsory bundling of third-party products with their own offerings and must ensure that incentive structures do not encourage inappropriate sales. The directions also prohibit the use of deceptive dark patterns in digital interfaces, such as:
- False urgency
- Basket sneaking
- Confirm shaming
- Forced actions
- Subscription traps
- Misleading advertisements
Additionally, banks must establish mechanisms to collect customer feedback within 30 days of product sales and provide compensation where mis-selling is established. Customers who suffer losses due to mis-selling must be refunded and compensated in accordance with the bank’s approved policy.
Overall, the amendment represents a significant step towards strengthening consumer protection and fostering responsible conduct in the banking sector while ensuring fair treatment of customers across all stages of the product lifecycle.
