By Admin 
RBI Draft Rules for Mis-Selling: Keeping in mind the protection of the interests of the customers, the Reserve Bank of India (RBI) has issued a new draft rule to crack down on mis-selling by banks. This draft “RBI (Commercial Banks – Responsible Business Conduct) Amendment Direction 2026” released on Wednesday will come into effect from July 1, 2026. Under this draft, if any product or service is proved to be sold by a bank in a wrong manner, then the bank will have to return the entire amount to the customer and will also have to compensate for the loss incurred.
What is the new rule?
According to the new rules, banks and other financial institutions will maintain transparency and responsibility while advertising, marketing or selling any financial product or service. It will be mandatory to obtain explicit consent from customers before contacting them and contact can be made only during office hours. RBI has also said that the internal policies of banks should not be such that they encourage employees or Direct Selling Agents (DSAs) to indulge in mis-selling in any way. That is, the incentive structure should not be one that focuses only on increasing sales, even if that is not in the best interest of the customer.
The central bank has also adopted a strict stance, especially regarding the sale of third-party products and services. The draft states that employees engaged in marketing or selling of such products should not receive any incentive, directly or indirectly, from the third parties concerned. Further, a bank will not be allowed to forcibly add any third party product to its product (tie-in sale). The customer will be given the right to choose freely among the options of different companies
Why did RBI release the draft?
RBI has also proposed that any kind of ‘dark pattern’ should not be used in the digital platforms and apps of banks. Dark patterns are designs or techniques that can mislead customers into unknowingly agreeing to a product or service. About a dozen such examples have been mentioned in the draft, which instructions have been given to avoid.
In fact, in recent years, complaints of mis-selling of insurance, investment plans or other products by banks and financial institutions had increased. In view of this, RBI Governor Sanjay Malhotra had announced to bring new rules to curb mis-selling. Under this, this draft has been issued. RBI has sought suggestions and objections on this draft from the general public and concerned parties till March 4.
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