RBI’s Responsible Business Conduct (Second Amendment) Directions, 2026

Introduction

The Reserve Bank of India (“RBI”) has, over the years, strengthened its regulatory framework to promote responsible business conduct and ensure fair treatment of customers in the banking sector. In furtherance of this objective, the RBI issued the Reserve Bank of India (Commercial Banks – Responsible Business Conduct) (Second Amendment) Directions, 2026 on 15 June 2026, amending the existing Reserve Bank of India (Commercial Banks – Responsible Business Conduct) Directions, 2025. Effective from 1 January 2027, the Amendment Directions introduce enhanced requirements governing the advertisement, marketing and sale of financial products and services by commercial banks, with particular focus on customer consent, product disclosures, digital sales practices, and the prevention of mis-selling. 

Key Changes

Explicit Customer Consent

The Amendment Directions require banks to obtain a customer’s explicit consent before offering or selling any financial product or service. Such consent must be specific, informed, and unambiguous, and may be obtained through a signed declaration, OTP-based approval, digitally recorded confirmation, or consent incorporated in a clearly demarcated section of the relevant agreement. Where more than one product is offered through a single physical or digital application, each product must be separately identified, enabling customers to choose only those products they intend to avail. Banks are also required to preserve records of such consent until one year after the contractual arrangement has ceased. 

Product Disclosures and Digital Sales Practices

Before obtaining customer consent, banks must prominently disclose key product features, including fees, charges, interest rates, risks, financial commitments, lock-in conditions, and exit terms. Where prescribed, standard disclosure formats such as the Key Facts Statement (KFS) or Most Important Terms and Conditions (MITC) must be used. The Directions further require consent interfaces to ensure that customers review the applicable terms and conditions before providing consent and prescribe that the default option for consent should be “No” or “I do not agree”. Banks and their DSAs/DMAs are also prohibited from deploying dark patterns in customer-facing digital interfaces. 

Measures Against Mis-selling

The Amendment Directions define “mis-selling” to include, among other things, the sale of unsuitable financial products, sale without explicit consent, compulsory bundling of products, and sale based on misleading or incomplete information. Banks are required to assess the suitability and appropriateness of products by considering factors such as product features, risk-return attributes, and complexity in light of the customer’s age, income, financial literacy, and risk tolerance. The Directions also prohibit compulsory bundling of third-party financial products with a bank’s own products, except in the limited circumstances specified in the Directions. 

Conclusion

The Amendment Directions introduce a more structured framework for the advertisement, marketing, and sale of financial products by commercial banks, with particular emphasis on customer consent, product disclosures, and fair sales practices. As the revised framework comes into effect on 1 January 2027, commercial banks and their distribution partners will need to ensure that their product distribution processes, customer consent mechanisms, and digital sales practices are aligned with the requirements prescribed by the RBI. 

Last Updated on 17 July, 2026