RRBs must disclose commissions on mutual fund/insurance sales
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2009-10/250 · issued 09 Dec 2009 · ~1 min read
Quick answerRBI mandates RRBs to disclose all commissions or fees received from mutual fund and insurance companies to customers when marketing or referring their products, effective immediately.
What changed
Previously, RRBs were allowed to market mutual funds and insurance products on a referral or corporate agency basis without explicit disclosure requirements. Now, RBI has decided that RRBs must disclose to customers all commissions or other fees received from these companies for marketing or referring their products.
What it means for you
This move enhances transparency and customer protection, ensuring customers are aware of potential conflicts of interest when RRBs recommend competing financial products. Banks must update their disclosure practices and train staff to communicate these details clearly to customers.
Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.
What banks were required to do at the time
Implement a process to disclose all commissions and fees received from mutual fund and insurance companies to customers at the point of marketing or referral.
Update internal policies and customer-facing documents to include mandatory disclosure of compensation details.
Train branch staff and agents on the new disclosure requirements and ensure compliance across all RRB branches.
Coordinate with mutual fund and insurance partners to obtain accurate commission/fee data for disclosure.
Who it affects
All Regional Rural Banks (RRBs), RRB branch staff involved in marketing or referral of financial products, Customers of RRBs who are offered mutual fund or insurance products
❓ Common questions
Regulatory timeline
Decoded by BankPulse2026-06-19 08:00 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn03 Aug 2026, 04:00 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
Does this circular apply to all types of insurance and mutual fund products marketed by RRBs?
Yes, the disclosure requirement applies to all competing products of various mutual fund and insurance companies that RRBs market or refer to customers.
When does this disclosure requirement come into effect?
The instructions are effective immediately from the date of the circular, December 9, 2009.
What should RRBs do if they receive commissions in forms other than cash?
The circular requires disclosure of all commissions or other fees 'in any form', so RRBs must disclose any non-cash compensation as well.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed byRBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #1774: RPCD.CORRB.No.45/03.05.33/2009-10 — "Marketing / Distribution of Mutual Fund Units / Insurance etc., products by RRBs" dated December 9, 2009”
📜 Read the original circular — full text as issued by RBI
RBI/2009-10/250
RPCD.CORRB.No.45/03.05.33/2009-10
December 09, 2009
The Chairman
All Regional Rural Banks (RRBs)
Dear Sir,
Marketing /Distribution of Mutual Fund Units /Insurance etc., products by RRBs
Please refer to our circular RPCD.No.RRB.BC.82/03.05.33/2005-06 dated May 17, 2006 allowing RRBs to undertake marketing of units of mutual funds as agents subject to certain terms and conditions.
2. Similarly, in terms of paragraph 2 of our Circular RPCD. CO. RRB.BC.No.99/03.05.33(G)/2004-05 dated May 12, 2005, RRBs were allowed to undertake insurance business on a referral basis without any risk participation through their network of branches subject to certain conditions. Further, in terms of our circular RPCD.CO.RRB.BC.No.86/03.05.33(G)/2006-07 dated May 03,2007, RRBs have been permitted for taking up corporate agency business for distribution of insurance products without risk participation subject to conditions mentioned in para 2 of the said circular.
3. In all the activities referred to above, it is likely that RRBs may be marketing / referring, several competing products of various mutual fund / insurance companies to their customers. Keeping in view the need for transparency in the interest of the customers to whom the products are being marketed / referred, it has since been decided that RRBs should disclose to the customers, details of all the commissions / other fees (in any form) received, if any, from the various mutual fund / insurance companies for marketing/ referring their products.
4. The above instructions will come into force with immediate effect.
5. Please acknowledge receipt of the circular to our Regional Office concerned.
Yours faithfully
(R.C.Sarangi)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2009-10/250 · issued 09 Dec 2009. The plain-English explanation above is BankPulse’s own independent summary.
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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=5408&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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