RBI Considers Fresh Guidelines to Curb Mis-selling

Concerned over the rise in mis-selling of products by banks and non-banking financial companies (NBFCs), the Reserve Bank of India (RBI) is examining whether to come up with norms to curb such practices.

- MANOJIT SAHA

Observing that pushing financial products, such as insurance, indiscriminately to unaware consumers may be detrimental to their well-being, RBI Deputy Governor M Rajeshwar Rao said, "We are examining whether it necessitates framing of guidelines to address mis-selling of financial products and services by REs (regulated entities)."

"There are reports of mis-selling of financial services, such as insurance products. The concern is that such mis-selling without regard to suitability and appropriateness would beget distrust in schemes aimed at providing a safety net to low-income households by creating artificial boundaries," Rao said in a speech on financial inclusion at an event organised by HSBC last week.

The speech was uploaded on the RBI website on Monday.