RBI’s 2026 Directions on Responsible Business Conduct for AIFIs – Advertising, Marketing & Sales Overhauled

The Reserve Bank of India has issued the Reserve Bank of India (All India Financial Institutions – Responsible Business Conduct) Second Amendment Directions, 2026, creating a detailed regulatory framework to govern how All India Financial Institutions (AIFIs) advertise, market and sell both their own and third-party financial products and services.

These Directions, issued under Section 45L of the Reserve Bank of India Act, 1934, amend the existing Reserve Bank of India (All India Financial Institutions — Responsible Business Conduct) Directions, 2025, and will take effect from January 1, 2027.

The revised regime aims to:

  • Prevent mis-selling and coercive bundling of financial products
  • Curb manipulative “dark patterns” in digital interfaces
  • Mandate clear, informed and recorded explicit consent from customers
  • Fix responsibility on AIFIs for the conduct of DSAs, DMAs and their sub-agents
  • Ensure suitability and appropriateness assessment of products
  • Put in place post-sale feedback and compensation mechanisms

Below is a structured overview of the key components of the amended framework.

1. New Definitions Introduced in the Directions

1.1 Key terms clarified in Chapter I

A new section of definitions (paragraph 3A) is introduced into the 2025 Directions. These terms are crucial for compliance:

  • Compulsory bundling

    • When an AIFI makes the availability of one product or service conditional on the customer also taking another product or service (whether its own or a third-party’s).
    • The second product becomes a forced pre-condition, not a voluntary choice.

  • Dark pattern

    • Any deceptive UI/UX design on a platform that manipulates customers into actions they did not truly intend, by undermining autonomy and informed choice.
    • Such patterns can amount to misleading advertisements, unfair trade practices or violation of consumer rights.

  • Direct Selling Agent (DSA) / Direct Marketing Agent (DMA)

    • Any non-employee entity or individual (whatever be their contractual label – including Loan Service Provider (LSP), etc.) engaged by an AIFI to sell, market, promote or influence customers to purchase its own or third-party products or services.

  • DSA / DMA sub-agent

    • Any individual appointed by the DSA/DMA who actually interfaces with customers and participates in marketing or selling on behalf of the AIFI.

Important Explanation
If an AIFI directly outsources sales/marketing activities to an individual, that person is treated as both DSA/DMA and DSA/DMA sub-agent for the purpose of these Directions.

  • Explicit consent

    • A recorded, specific and informed indication of a customer’s agreement, expressed through a clearly documented statement or affirmative action (e.g., OTP validation, e-sign, recorded call), for a particular action or arrangement with an AIFI.

  • Mis-selling

    • Sale of a financial product or service (own or third-party) in any of the following situations:
      1. The product is not suitable or appropriate for the customer based on their evaluated profile at the time of sale, even if explicit consent was taken; or
      2. The product is sold by withholding correct/complete information or by providing misleading information; or
      3. The product is sold without obtaining the customer’s explicit consent; or
      4. There is compulsory bundling of an additional product/service with the one requested by the customer; or
      5. Any other instance that is defined as mis-selling by the relevant financial sector regulator.

  • Third-party Product or Service (TPPS)

    • Any financial product or service offered by an AIFI to its customers on behalf of a third-party provider, under an agency or referral arrangement permitted by the Reserve Bank of India (All India Financial Institutions — Undertaking of Financial Services) Directions, 2025.

2. New Chapter on Advertising, Marketing and Sale – Chapter MA

A completely new Chapter MA is inserted after “Responsible Lending Conduct” to regulate the entire lifecycle of how AIFIs and their agents interact with customers for sales.

2.1 Mandatory Board-approved Policy

Paragraphs 32A–32B require every AIFI to adopt a comprehensive, Board-approved policy that covers:

  • Advertising, marketing and sale of:
    • AIFI’s own products and services, and
    • Third-party products/services (TPPS) offered through the AIFI
  • Criteria and mechanism to assess suitability and appropriateness of products for different categories of customers
  • Internal feedback framework to capture customer understanding and experience
  • A clear customer compensation policy for proven cases of mis-selling

Where AIFIs use DSAs/DMAs, the policy must also specify:

  • Eligibility standards and due diligence requirements (pre-engagement and ongoing)
  • Training obligations for DSA/DMA sub-agents
  • Functions and roles that can be outsourced to DSAs/DMAs
  • Performance benchmarks and evaluation
  • Inspection/audit arrangements and monitoring controls
  • Procedures for dealing with non-compliant DSAs/DMAs and corresponding penal/disciplinary measures

3. Governance of DSAs/DMAs and Their Sub-agents

3.1 Public disclosure of empanelled DSAs/DMAs

Under paragraph 32C, AIFIs must: