RBI Update - Reserve Bank of India (Non-Banking Financial Companies – Responsible Business Conduct) Second Amendment Directions, 2026

The Reserve Bank of India (Non-Banking Financial Companies – Responsible Business Conduct) Second Amendment Directions, 2026, effective from January 1, 2027, introduce a comprehensive framework governing the advertising, marketing and sale of financial products and services by NBFCs (excluding CICs, NBFC-AAs, NOFHCs and NBFCs without customer interface). The Directions mandate NBFCs to formulate a comprehensive policy covering product suitability and appropriateness, customer consent, prevention of mis-selling, customer compensation, and oversight of Direct Selling Agents (DSAs) and Direct Marketing Agents (DMAs). The amendments introduce key concepts such as explicit consent, compulsory bundling, mis-selling, dark patterns and third-party products and services (TPPS), while requiring NBFCs to ensure transparent disclosures, obtain product-wise customer consent, assess suitability of products before sale, prohibit compulsory bundling of third-party products, regulate conduct of employees and sales intermediaries, and prevent the use of deceptive digital practices. Further, NBFCs are required to establish customer feedback mechanisms, provide compensation in cases of mis-selling, maintain public disclosures relating to DSAs/DMAs, and ensure compliance with applicable guidelines issued by RBI, SEBI, IRDAI, PFRDA, TRAI and other regulatory authorities, thereby strengthening consumer protection, fair sales practices and accountability across physical and digital distribution channels.