RBI has asked banks and NBFCs to put in place a comprehensive policy for advertising, marketing and the sale of their own as well as third-party financial products and services | Photo Credit: FRANCIS MASCARENHAS

The RBI on Monday issued comprehensive instructions on advertising, marketing and sale of financial products and services by banks and NBFCs, whereby they have to ensure that their policies and practices do not create incentives for mis-selling or lead to bundling of products/services.

Further, banks and NBFCs (regulated entities/REs) cannot resort to “dark patterns” to mislead or trick users into doing something they originally did not intend or want. They have to obtain explicit customer consent, which indicates agreement to a specific action by or arrangement with them.

The instructions, which come into effect from January 1, 2027, specify what constitutes mis-selling and require them to determine the suitability and appropriateness of a financial product/service for individual customers.

Feedback mechanism

The REs shall establish a mechanism to seek feedback from customers, within a period of 30 days from the sale of any financial product/service, to ensure that customers have understood the features of the financial product/service and also the risks associated with such financial product/service.

RBI, in its Responsible Business Conduct Second Amendment Directions, 2026 for REs, emphasised that they should eschew the practice (compulsory bundling) of making availment of one product/service by a customer conditional upon availment of another product/service, whether own or third-party, offered by them.

REs cannot resort to “dark patterns” – any practice or deceptive design pattern using user interface or user experience interactions on any platform that is designed to mislead or trick users to do something they originally did not intend or want to do.

This is done by subverting or impairing the consumer autonomy, decision-making or choice and amounts to misleading advertisement or unfair trade practice or violation of consumer rights.

Customer consent

REs have to obtain explicit customer consent, which is a specific, informed and unambiguous indication of an individual’s choice, given through a duly recorded/documented statement or clear affirmative action. This indicates agreement to a specific action by or arrangement with them.

Mis-selling of a financial product/service, whether own or third party, includes the sale of a product/service which is neither suitable nor appropriate in view of the customer’s profile evaluated at the time of sale, notwithstanding her/his explicit consent; or the sale of a product/service without providing correct or complete information or by giving misleading information.

Further, mis-selling also includes the sale of a product/service without the customer’s explicit consent; or compulsory bundling of another product/service with the sale of the requested product/service; or the sale of a product/service involving any other element defined by the financial sector regulator concerned as mis-selling.

RBI has asked banks and NBFCs to put in place a comprehensive policy for advertising, marketing and the sale of their own as well as third-party financial products/services. This will cover aspects related to criteria for the determination of suitability and appropriateness of products/services offered to customers, feedback mechanism, customer compensation in cases of mis-selling, etc.

Published on June 15, 2026