Blitz Bureau
NEW DELHI: The Reserve Bank of India (RBI) on February 11, issued draft Responsible Business Conduct Amendment Directions, 2026, setting out detailed norms on advertising, marketing and sale of financial products and services by banks.
The draft directions, which will come into force from July 1, 2026, will apply to commercial banks, excluding small finance banks, payment banks, regional rural banks and local area banks.
Under the proposal, banks must frame a comprehensive policy governing the sale of their own as well as third-party financial products. The policy must address suitability the appropriateness of products, customer feedback mechanisms and compensation in cases of mis-selling.
The RBI has defined Direct Selling Agents (DSAs) and Direct Marketing Agents (DMAs) engaged in selling own or third-party products. Banks will be required to maintain and publish an updated list of such agents on their websites. Agents operating within bank premises will require to be clearly distinguishable from bank employees.
Products and services may be sold only with explicit customer consent, and consent for multiple products cannot be clubbed together. The draft defines mis-selling to include unsuitable sales, misleading information and sale without explicit consent. It also defines compulsory bundling, while clarifying that voluntary or complimentary product packages are excluded.
Banks will be prohibited from bundling third-party products with their own offerings or marketing third-party products as their own. Promotional material must be clear and factual, with full disclosure of fees, charges and interest rates.
Sales calls and visits will be allowed only between 9 am and 6 pm, unless specifically authorised by the customer. Banks are also barred from deploying “dark patterns” on user interfaces and must conduct user testing and periodic internal audits to identify and eliminate such practices.
Additionally, banks must seek customer feedback within 30 days of a product sale. In cases where mis-selling is established, banks will be required to refund the amount paid and compensate customers.
The primary driver for this amendment was a surge in consumer grievances regarding coercive cross-selling — where banks made loans contingent on buying insurance or mutual funds — and the rise of “dark patterns” in banking apps. These deceptive user interface (UI) designs trick users into unwanted subscriptions or hidden charges.
The Government’s Economic Survey FY24 and recent warnings from the Ministry of Consumer Affairs had also signalled a need to curb “short-term profit” motives that compromise customer trust.
Historically, RBI’s consumer protection focused on disclosure (the “fine print”) rather than suitability. These gaps persisted because:
Digital evolution: Legacy policies didn’t account for modern digital manipulation (dark patterns) that bypasses traditional informed consent.
Ambiguous definitions: “Mis-selling” lacked a strict legal definition that included product suitability; banks often escaped liability by claiming the customer signed the forms.
Clubbed consent: Previous rules allowed “all-in-one” checkboxes, enabling third-party bundling without explicit, separate approvals.
By mandating 100 per cent refunds plus compensation and requiring periodic UI audits, the RBI is shifting the burden of responsibility from the “buyer” to the “provider.”
RBI move to curb dark patterns is significant because these dark practices come in many forms:-
False urgency: Creating a fake sense of scarcity (for instance, “Only 2 minutes left to claim this offer!”) to pressure someone into a quick, unresearched purchase.
Basket sneaking: Automatically adding an extra product (like a small insurance cover or a “service fee”) to a transaction without explicit selection.
Confirm shaming: Using guilt-tripping language to make one feel foolish for declining an offer (for example, a button saying “No, I prefer losing my money” instead of a simple “No thanks”).