RBI Tightens Mis‑Selling Rules for Banks and Influencers

New RBI Rules Aim to Prevent Mis-Selling by Banks and Influencers(REUTERS)AI Quick ReadThe Reserve Bank of India (RBI) on Monday issued stricter norms to prevent banks and other financial institutions from mis-selling financial product. The revised rules, which will come into effect from January 1, 2027

Under the new norms, banks cannot design incentive structures that encourage employees or agents to aggressively sell products.

The revised rules also applies to social media influencers and digital marketing partners hired by banks and financial institutions.

"While payment of incentives to REs' (regulated entities) employees by third parties has been prohibited, the directions do not prohibit payment of incentives by REs to their employees," the central bank said. Rather, the objective of the provision is to ensure that the incentive structures do not lead to aggressive sales practices or mis-selling of products/services.

The latest amendments to the 'Advertising, Marketing and Sale of Financial Products and Services by Regulated Entities' comes amid a rise in complaints about customers being misled into buying financial products that may not be suitable for them.

RBI laid out a broad definition of mis-selling, which includes practices such as offering products that are unsuitable for the customer, providing misleading or inaccurate information, selling products without obtaining explicit consent from the customer, and mandatorily bundling products together.

"In cases where mis-selling of a financial product/service is established, the bank shall refund the entire amount ... and also intimate the customer about cancellation of the sale," the RBI said.

"The directions adopt a principle-based and channel-agnostic approach, placing overall responsibility on the RE for all advertising, marketing and sale of financial products undertaken directly or through agents or outsourced arrangements," it said.

Sanchari Ghosh is an Assistant Editor at Mint with over 12 years of experience in journalism, specialising in personal finance, DLT & DeFi, geopolitics and foreign policy, with a particular emphasis on how these areas intersect. <br> She writes extensively about how money works in everyday life—helping readers navigate personal finance decisions. <br> As AI reshapes investing behaviour, capital is increasingly flowing into decentralized ecosystems, redefining how assets are managed, traded, and valued. She focuses on explaining how money flows within frameworks like Distributed Ledger Technology (DLT), DeFi protocols, and crypto markets—while also exploring what the future of money could look like in a trustless, programmable financial world. <br> She also focuses on immigration-related issues, simplifying complex topics around visas, passports, overseas financial planning, and the many practical challenges Indians face while moving or living abroad. <br> Alongside personal finance, Sanchari has a strong understanding of international politics, contemporary and historical conflicts, and global state decisions. She closely tracks how geopolitical developments influence economies, markets, and individual financial choices, bringing together finance and global affairs in her reporting. <br> She began her career as a desk editor, which gave her a strong foundation in news writing. Over time, her interest naturally shifted toward personal finance. Before joining Mint in 2020, she worked DNA, The Times of India, Outlook Money, BloombergQuint, and ETMoney. At Mint, she got an opportunity to expand her coverage to include immigration and geopolitical developments while continuing to closely follow personal finance trends and market movements.As a journalist, she is committed to accuracy, intellectual rigour, and fairness. <br> She is an English Major and her work took her across cities including Delhi, Mumbai, and Pune. Living independently from an early age gave her firsthand experience in managing life and money on her own. This practical exposure sparked her strong interest in personal finance. <br> Outside the newsroom, Sanchari is a sports enthusiast who regularly plays lawn tennis and squash. In her younger years, she was also a national-level badminton player.

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