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

The Reserve Bank of India (Rural Co-operative Banks – 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 Rural Co-operative Banks (RCBs). The amendments define key concepts such as compulsory bundling, dark patterns, explicit consent, mis-selling, Direct Selling/Marketing Agents (DSAs/DMAs), and third-party products and services (TPPS), and mandate RCBs to adopt detailed policies covering suitability assessment, customer protection, compensation for mis-selling, and oversight of DSAs/DMAs. RCBs must obtain explicit customer consent, ensure transparent disclosures of product features, risks, fees and charges, prohibit dark patterns and compulsory bundling, maintain a Code of Conduct for employees and agents, and establish safeguards against mis-selling. The Directions also prescribe standards for promotional communications, customer interactions, suitability and appropriateness assessments, multilingual documentation, acknowledgment of applications, post-sale documentation, customer feedback mechanisms, and compensation for proven cases of mis-selling. Additionally, RCBs are required to comply with applicable guidelines issued by RBI, SEBI, IRDAI, PFRDA, TRAI, DoT, and the CCPA, with an annexure providing an illustrative list of prohibited dark patterns relevant to banking services.