RBI draft guidelines on advertising, marketing and sale of financial products by regulated entities
The Reserve Bank of India has released a comprehensive set of draft Amendment Directions aimed at standardising how regulated entities advertise, market and sell financial products and services. These proposals, issued on February 11, 2026, are open for public consultation until March 4, 2026, and represent a significant expansion of the existing customer protection framework.
At present, detailed norms on customer appropriateness, suitability and related conduct issues are primarily applicable to Scheduled Commercial Banks (excluding Regional Rural Banks) and Housing Finance Companies, and mainly in connection with their insurance agency activities. After a detailed review, the Reserve Bank of India has now proposed to extend and deepen these rules so that they apply across a much wider universe of banks and Non-Banking Financial Companies (NBFCs), and to a broader range of products and distribution practices.
Background and context of the proposed amendments
Historically, RBI’s supervisory focus in this area has centred on:
- The sale of insurance products by Scheduled Commercial Banks (other than Regional Rural Banks) and Housing Finance Companies.
- Ensuring that such entities observe principles of customer appropriateness and suitability when offering insurance as agents.
- Limiting mis-selling risks in a narrow set of agency relationships.
However, the financial services ecosystem has evolved considerably, with regulated entities now:
- Offering a diverse basket of third-party financial products (such as mutual funds, insurance, pension and other investment-linked offerings).
- Relying heavily on outsourced channels, including Direct Sales Agents (DSAs) and Direct Marketing Agents (DMAs).
- Using digital and online platforms that can sometimes incorporate “dark patterns” — deceptive or manipulative interface designs that may nudge customers into choices that may not be in their best interest.
In this backdrop, and following the announcement in the “Statement on Developmental and Regulatory Policies” dated February 6, 2026, the Reserve Bank of India has drafted a unified and strengthened conduct framework to govern advertising, marketing and sales of financial products and services, whether proprietary or third-party.
Scope of the proposed conduct framework
The new instructions are intended to apply to:
- All banks (including categories previously not covered for these specific aspects).
- All NBFCs, including Housing Finance Companies.
The framework is designed to cover:
- Advertisement standards for financial products and services.
- Marketing practices, including digital and physical campaigns.
- Sales processes and scripts used by employees, DSAs and DMAs.
- Distribution and referral of third-party financial products and services.
- Explicit measures to curb mis-selling.
- Specific safeguards against the use of dark patterns in digital interfaces and customer journeys.
Note: The draft directions are not limited to the entities’ own products; they expressly extend to third-party products that banks and NBFCs distribute or refer as part of their financial services offerings.
Draft Amendment Directions on Responsible Business Conduct
To operationalise this enhanced oversight, the Reserve Bank of India has issued multiple draft Amendment Directions that will modify existing “Responsible Business Conduct” Directions applicable to various categories of regulated entities. These are:
Reserve Bank of India (Commercial Banks – Responsible Business Conduct) Amendment Directions, 2026
These will update the conduct standards for commercial banks, focusing on how they advertise, market and sell both in-house and third-party financial products, whether through their own staff or through DSAs/DMAs.Reserve Bank of India (Small Finance Banks – Responsible Business Conduct) Amendment Directions, 2026
Small Finance Banks, which serve a large base of small borrowers and depositors, will see specific alignment with broader customer protection principles, especially in relation to suitability and prevention of mis-selling.