The Reserve Bank of India has finally moved to protect common people from aggressive bank agents. New draft rules released this week aim to stop banks from selling insurance or mutual funds that customers do not actually need. If a bank is caught mis-selling any product they must now refund the entire amount to the customer. This is a huge shift in power from the lenders to the account holders. These rules are expected to come into force from July 1 2026 after public feedback.
Under the new guidelines suitability is now a legal requirement. This means banks must prove that a product matches your age and income before they sell it. They cannot just push high commission products to retired people or low income workers anymore. The RBI is also banning dark patterns in banking apps. These are digital tricks like pre-ticked boxes or hidden charges that trick users into signing up for things. Every single product will now need separate and clear consent from the customer.
Another big change involves third party agents sitting inside bank branches. Many people think these agents work for the bank but they are often from outside companies. Banks will now have to list these agents clearly and take full responsibility for their actions. If an agent lies about a policy the bank cannot just blame the outsider. They must compensate the customer for any financial loss suffered due to bad advice.
The central bank wants banks to reach out to customers within 30 days of a sale to get feedback. They also have to file regular reports on these findings. The draft is open for comments until March 4 2026. For millions of Indian bank users this is the strongest protection ever offered against forced sales. It puts an end to the “agree to all” checkboxes that have caused so much trouble for years.
