RBI Cracks Down on Insurance Mis-selling and Forced Product Bundling

The Reserve Bank of India (RBI) is set to introduce stricter measures against insurance mis-selling, forced product bundling, and deceptive digital practices known as dark patterns, with new rules expected to take effect from January 2027. The move aims to strengthen consumer protection and improve transparency in the sale of financial products.

Under the proposed framework, banks will be prohibited from pressuring customers to purchase insurance policies, ULIPs, or other financial products as a condition for availing banking services. The regulations will also target manipulative digital designs that influence customer decisions without clear disclosure.

The initiative reflects growing regulatory concern over customer complaints related to mis-selling and unfair sales practices. Industry experts believe the new measures will enhance trust in the financial system, improve customer choice, and promote responsible distribution of insurance and investment products.

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