RBI tightens mis-selling rules; banks barred from incentive structures that encourage aggressive sales

The Reserve Bank of India has tightened norms for advertising, marketing, and selling financial products, effective January 1, 2027. These revised directions aim to curb mis-selling and hold regulated entities accountable across all distribution channels, including social media influencers and digital marketing intermediaries. The RBI clarified that incentive structures will be reviewed to prevent aggressive sales practices.