RBI Draft Rules on Mis-selling and Loan Recovery
Why in the news
RBI released draft amendment directions to protect customers, covering how products are advertised and sold and how loans are recovered. Expected start: July 1, 2026.
Objectives
Stop mis-selling and unsuitable sales incentives, prevent coercive recovery and raise trust.
| Provision | Requirement |
|---|---|
| Third-party sales | No incentives for staff to sell third-party items such as insurance |
| Bundling | Forced bundling banned; loan money cannot pay for bundled products |
| Dark patterns | Manipulative digital designs prohibited |
| Suitability | Assess age, income and risk tolerance first |
| Consent | Separate consent per product; customer picks the provider |
| Feedback | Within 30 days of sale; half-yearly reports on repeated issues |
| Redress | Full refund and compensation for related losses |
Broader mis-selling
Includes selling an unsuitable product despite formal consent, and pressuring customers or narrowing their choice of providers.
Loan recovery
- Barred: harassment, threats, public humiliation, excessive or anonymous calls, contacting relatives, odd-hour recovery.
- Required: recorded calls, trained agents, clear grievance channels.
Exam angle
- Expected effective date: July 1, 2026.
- Feedback window: 30 days.
- Term: dark patterns.