pc
nid 93266
Jun 16, 2026
pthandapani@vixio.com
India
Reserve Bank of India
financial services
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2171 charsIndia's Reserve Bank Issues Second Amendment Directions on Non-Banking Financial Company Responsible Business Conduct
On June 15, 2026, the Reserve Bank of India (RBI) issued the Reserve Bank of India (Non-Banking Financial Companies – Responsible Business Conduct) Second Amendment Directions, 2026, introducing comprehensive instructions on advertising, marketing and sale of financial products and services by non-banking financial companies (NBFCs). The directions apply to most NBFCs, excluding Core Investment Companies, NBFC-Account Aggregators, Non-Operative Financial Holding Companies, and NBFCs without customer interfaces.
The amendment establishes new requirements for responsible business conduct across several areas. NBFCs must now implement policies governing advertising, marketing and product sales that address suitability and appropriateness criteria, feedback mechanisms, and customer compensation for mis-selling. The directions define mis-selling to include unsuitable products, incomplete or misleading information, sales without explicit consent, and compulsory bundling of products. NBFCs engaging Direct Selling Agents (DSAs) or Direct Marketing Agents (DMAs) must maintain updated lists of these representatives on their websites and ensure they possess required qualifications. The directions prohibit dark patterns—deceptive design practices that manipulate user interfaces—and require NBFCs to comply with guidelines issued by the Central Consumer Protection Authority (CCPA).
Key conduct requirements include obtaining explicit customer consent before selling products, prominently disclosing key features and risks, restricting marketing calls to 9:00 am to 7:00 pm, and establishing feedback mechanisms within 30 days of sale. The directions also establish complaint procedures for mis-selling, requiring NBFCs to refund amounts and compensate customers for losses when mis-selling is established. NBFCs must ensure all documents are available in regional languages or languages understood by customers.
The Second Amendment Directions take effect on January 1, 2027. The RBI simultaneously issued a related amendment to the Reserve Bank of India (Non-Banking Financial Companies – Undertaking of Financial Services) Second Amendment Directions, 2026.
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1486 charsReserve Bank of India Issues Second Amendment Directions on Non-Banking Financial Company Responsible Business Conduct
The Reserve Bank of India (RBI) has issued the Reserve Bank of India (Non-Banking Financial Companies – Responsible Business Conduct) Second Amendment Directions, 2026.
The amended directions contain:
New definitions for key terms including "compulsory bundling", "dark pattern", "direct selling agent (DSA)", "explicit consent", and "mis-selling".
Regulations prescribing the ethical conduct of Recovery Agents, requiring proper training in sensitivity, privacy, and the accurate communication of product terms and conditions.
Specific rules governing the advertising, marketing, and sale of financial products, mandating that NBFCs obtain explicit customer consent and rigorously assess product suitability based on an individual's financial literacy, risk tolerance, and income profile.
Provisions outlining the engagement of DSAs and DMAs, stipulating that NBFCs must maintain an up-to-date public list of agents, ensure their regulatory qualifications, and enforce a strict Code of Conduct.
Administrative measures imposing strict prohibitions on mis-selling, compulsory product bundling, and the use of deceptive "dark patterns"—such as false urgency, basket sneaking, and subscription traps—in digital user interfaces.
New requirements for customer feedback and compensation, directing NBFCs to establish mechanisms for post-sale feedback within 30 days and to fully refund and compensate customers if mis-selling is proven.
The amendments take effect on January 1, 2027.