RBI Tightens Rules On Mis-Selling, Bans Forced Bundling & Digital Dark Patterns In Banking
The Reserve Bank of India (RBI) has issued revised directions under its consumer protection and responsible business conduct framework, tightening rules on mis-selling, forced bundling, and digital sales practices by commercial banks. The framework combines provisions from two notifications issued on June 15, 2026, and will come into effect from January 1, 2027.
The directions define mis-selling to include unsuitable product sales, incomplete disclosure, lack of explicit consent, and tying one product to another. In such cases, banks will be required to refund the full amount and compensate customers for losses. Customers can raise complaints within 30 days of receiving signed agreements.
The RBI has banned compulsory bundling of financial products, including cases where insurance or other services are made mandatory for loan approvals. Each product must be offered separately with a distinct opt-in consent. Consent must be explicit, recorded, and captured through physical or digital modes, with default settings set to “No” or “I do not agree”.
Banks must disclose key terms such as fees, risks, and penalties upfront. Consent records must be retained for at least one year after contract closure. Direct selling and marketing agents, including sub-agents, will come under expanded oversight, with mandatory public disclosure of empanelled agents and operating rules.
The framework also prohibits digital dark patterns such as basket sneaking, subscription traps, forced actions, false urgency, drip pricing, and confirm shaming. Customer interfaces must be audited regularly, and suitability checks must be conducted before the sale of complex products. The rules will apply from January 1, 2027.
