RBI Update - Reserve Bank of India (Commercial Banks – Undertaking of Financial Services) Third Amendment Directions, 2026

The Reserve Bank of India (Commercial Banks – Undertaking of Financial Services) Third Amendment Directions, 2026, effective from January 1, 2027, revise the regulatory framework governing agency business and referral services undertaken by commercial banks and align customer conduct and protection requirements with the Reserve Bank of India (Commercial Banks – Responsible Business Conduct) Directions, 2025. The amendments redefine agency business and referral services, introduce the concepts of regulated financial products and services, third-party products and services (TPPS), and third-party product and service providers (TPPSPs), and permit banks to facilitate the sale of only regulated financial products and services through agency arrangements on a fee-based, non-risk participation basis. Banks are required to ensure compliance with the Responsible Business Conduct Directions, undertake appropriate due diligence of TPPSPs, maintain transparency regarding products offered through agency and referral arrangements, and ensure robust grievance redressal mechanisms. Under referral arrangements, banks may only market and refer customers to TPPSPs without undertaking any sales or post-sale activities, must clearly disclose their limited role, ensure that the bank’s name or brand does not feature in product documentation, and avoid integrating TPPS processes into banking platforms except through redirection links. The amendments also remove certain earlier provisions relating to agency and referral services and consolidate customer protection, conduct, disclosure and sales-related requirements under the Responsible Business Conduct framework.