RBI drafts stricter rules to curb bank mis-selling

India's central bank has moved to redraw the boundaries of how banks sell financial products, unveiling sweeping draft rules that target mis-selling, bundled sales and even "dark patterns" in banking apps.

- Subhana Shaikh

The proposed framework on responsible business conduct released by the Reserve Bank of India (RBI) on Wednesday mandates explicit, recorded consent for every product, bars coercive cross-selling, and requires full refunds with compensation where mis-selling is proven.

Comments on the draft have been invited until 4 March. The new regulations will come into effect from 1 July.

The RBI had said in its monetary policy last week that said third-party products sold by banks must be suitable to customer needs and aligned with individual risk appetite.

The draft guidelines introduce a formal definition of 'misselling', covering the sale of products that are unsuitable for a customer's profile, providing misleading or incomplete information, selling without 'explicit consent', and 'compulsory bundling of products.