What changed
RBI has introduced new definitions for 'compulsory bundling', 'dark pattern', 'direct selling agent', 'DSA sub-agent', 'explicit consent', and 'mis-selling' in the Reserve Bank of India (Local Area Banks - Responsible Business Conduct) Directions, 2025.
What it means for you
These changes aim to prevent misleading advertisements, ensure customer autonomy, and promote fair trade practices in the banking sector. Local Area Banks must adhere to these guidelines to maintain a responsible business conduct.
What you must do
- Review and update marketing strategies to avoid 'dark patterns' and ensure transparency.
- Implement measures to obtain explicit consent from customers before selling financial products/services.
- Avoid 'compulsory bundling' of products/services and ensure customers are aware of all options.
- Train staff on new definitions and guidelines to prevent mis-selling.
Who it affects
Local Area Banks, Customers, Financial Sector Regulator
What is 'compulsory bundling'?
Compulsory bundling refers to making a product/service available to a customer only if they also purchase another product/service.
What is 'dark pattern'?
Dark pattern refers to deceptive design patterns or practices that mislead or trick customers into making decisions they did not intend to make.
What is 'explicit consent'?
Explicit consent is a specific, informed, and unambiguous indication of a customer's choice, given through a recorded statement or clear affirmative action.