Skip to content
Free updates Login
BankingNABARD / RBI

RBI Mis-Selling and Broker Funding Norms May Cut Banks’ Fee Income

26 February 20261 min read
BANKING & FINANCERBI Mis-Selling andBroker FundingNorms May CutBanks’ Fee Income26 February 2026safalsetu.com

Why in the news

Analysts expect new RBI rules to dent bank fee earnings, with a short-term hit and a milder long-term effect.

Mis-selling norms

  • Curb bundled sales and dark patterns; ensure suitability, clear consent and compensation.
  • Large private banks face lower cross-selling commissions.

Broker funding (final, 13 February)

RuleDetail
Proprietary tradingNo funding, except limited market-making
Collateral100% for most exposures
GuaranteesAt least 50% collateral; minimum 25% cash

Exam angle

  • Guarantee fees run 50-100 basis points a year.
  • Exposure is modest, so impact may stay contained.

Test yourself

1. What cap on banks' capital market exposure appears in RBI's final broker funding guidelines?

Capital market exposure is limited to 20% of banks' net worth.

2. Which practice do RBI's mis-selling guidelines prohibit for banks?

Banks cannot bundle third-party products with their own offerings.

3. For bank guarantees to brokers, how much collateral must back them under RBI's final norms?

Guarantees need at least 50% collateral and a minimum 25% in cash.

This topic is part of Daily Current Affairs 25 February 2026 (9 topics).

All topics of the dayDay quizFebruary 2026

Read more