This article published in Livemint on 30th March 2026 evaluates the Reserve Bank of India's (RBI) draft proposals to curb the mis-selling of financial products, and argues that while these are a necessary, they are an incomplete step towards stronger consumer protection outcomes for the Indian citizen. A key highlight of the proposals is the expanded definition of mis-selling, which now includes selling unsuitable products even with customer consent, providing misleading information, bundling products compulsorily, and using deceptive digital tactics. This shifts responsibility onto banks and NBFCs to ensure that products genuinely match customer needs, rather than relying on formal consent as a safeguard. The proposals also address systemic issues like forced bundling—such as insurance linked to loans—and "dark patterns" in digital interfaces. These measures reflect the RBI's recognition of both traditional and technology-driven forms of malpractice. However, the article points out specific shortcomings. The proposals lack clarity on how regulated entities should assess and document product suitability, which could weaken enforcement. There is also ambiguity in grievance redressal processes, including how mis-selling will be identified and resolved, potentially discouraging customers from filing complaints. Additionally, the proposed 30-day feedback mechanism may be too slow for timely corrective action. Finally, regulatory gaps remain, as the rules do not cover all intermediaries involved in selling financial products, limiting their overall effectiveness. The Financial Stability and Development Council (FSDC) under the honorable Finance Minister, offers a coordination mechanism to ensure same standards apply across all distribution channels of the same product, and must be used.
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