Comments to Draft Reserve Bank of India (Commercial Banks – Responsible Business Conduct) Amendment Directions, 2026, dated 11 February 2026

In this response, we present our comments to the Draft Amendment Directions for ‘Advertising, Marketing and Sales of Financial Products and Services by Regulated Entities’ issued by the Reserve Bank of India on February 11, 2026.

The Draft Amendments provide detailed guidance to all regulated entities (REs) on the aspects of advertising, marketing and selling financial services and products (own and third-party products) to customers. They also provide guidance on what constitutes as mis-selling, encourages firms to review incentive structures and sales practices that encourage mis-selling and lead to adversarial customer outcomes.

We divide our comments in four sections:

Section 1: Suitability and Appropriateness

1. We suggest that suitability assessment be made a point-of-sale exercise rather than being a continuous process.
2. We recommend prescribing a baseline of principles on suitability assessments to maintain a uniform customer protection regime across REs.
3. We suggest that, in specific cases, consent may be allowed to override suitability assessment and propose a potential process for the same.
4. We highlight the need for greater clarity regarding remedial actions in the event a customer finds the product unsuitable.

Section 2: Conduct of RE employees and that of Direct Sales Agents (DSAs)/Direct Marketing Agents (DMAs)

1. We propose measures to mitigate any inadvertent artificial distinction between direct sales by the RE staff and agent-sourced sales. Such distinctions may otherwise lead to differential standards for suitability assessment, grievance redressal, and post-sale feedback between the two channels.

Section 3: Issue of mal incentives

1. We suggest that the measures aimed at addressing mal incentives leading to mis-sale not only focus solely on the frontline staff but also encourage REs to use incentives to push suitable sales. For this, drawing on experience from UK, US and Australia, we provide recommendations to discourage perverse incentives, encourage customer-oriented incentive structures that can encourage suitable sales and offer practical guidance on how REs can reorient their existing incentive structures.

Section 4: Dark Patterns

1. We recommend explicitly prohibiting the use of dark patterns by DSAs and DMAs, acting on behalf of REs.
2. We suggest the use of external audits and increased scope for customer feedback for more effective regulation of dark patterns.

Read the full response here.