RBI Update - Reserve Bank of India (Regional Rural Banks - Responsible Business Conduct) Second Amendment Directions, 2026

The Reserve Bank of India (RBI) has issued the Reserve Bank of India (Regional Rural Banks – Responsible Business Conduct) Second Amendment Directions, 2026, effective from 1 January 2027, introducing a comprehensive framework governing the advertising, marketing and sale of financial products and services by Regional Rural Banks (RRBs). The Directions strengthen customer protection by mandating explicit customer consent, suitability and appropriateness assessments, transparent disclosures, customer feedback mechanisms, and compensation for losses arising from mis-selling. The framework defines and prohibits practices such as mis-selling, compulsory bundling, and the use of dark patterns in digital interfaces, while prescribing robust governance requirements for the engagement, oversight, and conduct of Direct Selling Agents (DSAs) and Direct Marketing Agents (DMAs). RRBs are also required to implement detailed policies, codes of conduct, grievance redressal systems, and controls over the distribution of both own and third-party financial products and services, with the objective of promoting fair business practices, transparency, accountability, and enhanced consumer confidence in the banking sector.