Governor says RBI will not curb bancassurance

RBI chief Sanjay Malhotra has encouraged the banking industry to undertake a need analysis for bancassurance

- Anshika Kayastha

The Reserve Bank of India (RBI) has ruled out any ban or curbs on bancassurance, even as concerns mount over rampant misselling of insurance products by bank staff. Addressing a post-policy conference on Wednesday, Governor Sanjay Malhotra backed the insurance regulator's stance that the distribution of insurance products through banks should not be restricted.

While acknowledging rising complaints of misselling, Malhotra said the central bank would focus on strengthening safeguards, rather than disrupting bancassurance, a key channel for financial inclusion. The governor's remarks come amid growing pressure on banks to boost fee-based income and recent government directives to delink insurance sales from employee incentives.