The Reserve Bank of India has imposed stricter control on the advertising, marketing and sale of financial products through the RBI Commercial Banks – Responsible Business Conduct Second Amendment Directions, 2026, which will come into force on 1 January, 2027.
The amendment expands the RBI’s framework governing promotional activities of commercial banks relating to the advertising, marketing and sale of financial products.
While the RBI Commercial Banks – Responsible Business Conduct Directions, 2025, established broad conduct principles, the amendment introduces detailed requirements relating to customer consent, suitability assessments, sales documentation, direct selling agents, prevention of mis-selling, advertising controls, digital practices, customer feedback and compensation.
The revised framework extends beyond the branch sales practices and addresses digital journeys, user interfaces, direct selling agents and direct marketing agents, third-party payment service provider presence within bank premises, internal incentive structures, bundling practices, and post-sale remediation.
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In practical terms, the RBI has moved the regulation of how products are sold into detailed, principal-level compliance obligation.
The amendment aims to make banks more responsible when dealing with customers, establishing clear rules on advertising, customer communication, consent and prevention of mis-selling.
The framework applies to most commercial banks except small finance banks, payment banks, regional rural banks and local area banks, covering both bank products and third-party products, including insurance, mutual funds and pension schemes distributed through banks.
Customer consent, disclosures and anti-mis-selling are key areas of focus, with banks required to obtain clear and explicit consent before selling any product, clearly explain all key details, and monitor direct selling agents and direct marketing agents to prevent mis-selling.
Banks may face several challenges while implementing these rules, including updating old systems and processes, monitoring large networks of agents, ensuring consistency across branches and digital channels.
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However, the amendment promotes fair practices through greater transparency in product information, better control over financial decisions, and fair treatment from banks and agents, ultimately strengthening customer trust and leading to a healthier financial system.
The long-term result will be stronger customer trust and a healthier financial system, with customers benefiting from safer and more reliable banking services, as banks ensure fairness, transparency and accountability at every stage of the sales process.
They will need to review digital platforms, marketing campaigns and incentive structures, eliminating incentives that encourage mis-selling, and ensuring that customers have the option to choose products without being forced into bundling.
Banks will prioritize transparency and accountability.
