Have you ever received a call promoting a loan, insurance policy, credit card, or investment product that sounded too good to ignore?
The Reserve Bank of India (RBI) is taking steps to ensure that financial products are marketed more responsibly and that customers receive clearer, more transparent information before making decisions.
In a recent announcement, RBI issued amended directions on the advertising, marketing and sale of financial products and services by regulated entities.
The new rules will apply to banks, NBFCs, housing finance companies, co-operative banks and other RBI-regulated institutions from January 1, 2027.
What could change for you?
If you’re investing, borrowing or purchasing financial products, the new framework is expected to bring several improvements.
You may see:
Clearer and more balanced product advertisements. Banks, NBFCs and other regulated entities will need to be upfront about what a product actually does and where its limits are.
The new rules specifically target dark patterns, things like fake urgency messages, hidden conditions or app and website designs built to nudge you into a decision you didn’t really intend to make.
If an institution is selling someone else’s product, it will also have to say so clearly instead of presenting it as its own.
Better disclosure of important product features, costs and risks. Expect separate application forms for each product, so a loan can’t quietly get bundled with an insurance policy without you noticing.
Agents will also need to tell you upfront if buying through them costs more, in fees or interest, than buying directly from the bank or NBFC.
The point is that you know exactly what you’re paying for before you sign anything.
Stronger oversight of sales agents and third-party distributors. Direct Selling Agents and Direct Marketing Agents, the people who call you or turn up at your door to sell loans, cards or investment products, will work under tighter rules.
They can’t pretend to be bank employees, make promises the bank hasn’t approved, or push for a sale outside reasonable hours.
Regulated entities will also need formal agreements with these agents that spell out what happens if they break the rules.
Fewer aggressive sales tactics designed to push unsuitable products. Compulsory bundling, where you’re made to buy an add-on just to get the product you actually wanted, is being prohibited.
So are manipulative digital tricks like artificial countdown timers, charges that only show up at checkout, or subscriptions that are easy to start and hard to cancel.
You’ll also need to give explicit, recorded consent for each product separately, instead of one blanket yes covering several products at once.
Greater accountability when financial institutions promote third-party offerings. If mis-selling is established, the institution will be required to refund and compensate you, not just apologise.
Many regulated entities will also have to check in with customers within 30 days of a sale to confirm the product was explained and sold correctly.
That’s a layer of accountability that didn’t exist as clearly before.
Why is the RBI making these changes?
Financial products are now sold through multiple channels, including websites, mobile apps, relationship managers, telecalling teams and third-party agents.
While this has made access to financial products easier, it has also increased the risk of mis-selling and misleading promotions. In some cases, customers may not fully understand the risks, costs or suitability of a product before signing up.
RBI’s latest directions aim to improve transparency and encourage financial institutions to put customer interests at the centre of their sales and marketing practices.
Why should you pay attention?
Many people make financial decisions based on information shared by banks, relationship managers, advertisements or digital platforms.
When product benefits are highlighted but risks are not explained properly, investors can end up choosing products that do not match their financial goals, time horizon or risk appetite.
RBI’s move is intended to create a fairer environment where financial products are presented more transparently and customers have a better understanding of what they are signing up for.
Summary
This isn’t just about advertisements.
It reflects a broader push towards responsible conduct in the financial sector. By strengthening rules around marketing and sales practices, RBI is aiming to improve trust between financial institutions and customers.
While the regulations will come into effect from January 1, 2027, they send a clear message today: financial products should be sold based on suitability and transparency, not just sales targets.
For you, this is a positive step. Better information often leads to better financial decisions.
