What changed
The amendment inserts definitions for compulsory bundling, dark pattern, Direct Selling Agent (DSA)/Direct Marketing Agent (DMA), DSA/DMA sub-agent, explicit consent, mis-selling, and third-party product or service, and adds a new section F on advertising, marketing and sale of financial products/services after paragraph 85.
What it means for you
SFBs must ensure every product offered is suitable for the customer's profile and that no sale is tied to another product. All marketing channels, including third‑party agents, must avoid deceptive designs and must obtain a documented, unambiguous consent from customers. Non‑compliance may lead to regulatory scrutiny under RBI's powers.
What you must do
- Review and revise marketing and sales policies to embed the new definitions and prohibitions.
- Train internal staff and all DSAs/DMA and sub‑agents on the ban on compulsory bundling, dark patterns and the need for explicit consent.
- Implement a system to capture, store and retrieve explicit consent records for each product sale.
- Set up regular monitoring, audit and reporting mechanisms to detect and prevent mis‑selling.
- Update contracts with DSAs/DMA and sub‑agents to reflect the RBI's responsible business conduct expectations.
Who it affects
Small Finance Banks, Marketing and sales teams, Direct Selling/Marketing Agents and sub‑agents, Compliance and risk officers, Bank customers
When do the new responsible business conduct rules become effective?
The amendment comes into force on 1 January 2027.
What does ‘compulsory bundling’ mean under the new directions?
It refers to making the availment of one product or service by a customer conditional upon availment of another product or service, whether own or third-party, offered by the SFB.
How should a bank obtain ‘explicit consent’ from a customer?
Explicit consent means a specific, informed and unambiguous indication of an individual’s choice, given through a duly recorded or documented statement or clear affirmative action, which indicates agreement to a specific action by or arrangement with an SFB.