The Reserve Bank of India (RBI) has issued sweeping directions to curb mis-selling and deceptive marketing of financial products by banks, NBFCs and other regulated entities, with the new norms set to take effect from January 1, 2027.
The framework bans the use of dark patterns on digital platforms and extends accountability to third-party agents, affiliates and even influencers engaged in promoting financial products. Institutions will have to ensure advertisements clearly disclose key features, risks, fees and charges, while customers’ explicit consent will be mandatory before any sale.
The RBI has also tightened rules around Direct Selling Agents (DSAs) and Direct Marketing Agents (DMAs), requiring due diligence, codes of conduct and public disclosure of authorised agents. Sales incentives that encourage mis-selling or coercive bundling of products have been discouraged.
In a significant consumer protection measure, regulated entities will be required to refund customers in cases where mis-selling is established. Marketing calls and visits will generally be restricted to 9 am to 7 pm, unless customers permit otherwise.
The directions, finalised after stakeholder consultations on draft proposals released in February, apply to commercial banks, co-operative banks, small finance banks, payments banks, regional rural banks, All India Financial Institutions, NBFCs and housing finance companies.
The move signals the RBI’s shift towards a conduct-based regulatory framework aimed at making financial product distribution more transparent, accountable and consumer-centric.
