Key facts
- RBI prohibits third-party incentives for employees of regulated entities selling financial products.
- Banks and NBFCs can incentivize their own employees for sales.
- Compulsory bundling of third-party products with bank/NBFC products is prohibited.
- Customers must have a choice of third-party product providers.
- Guidelines aim to prevent aggressive sales and mis-selling.
- Rules are effective January 1, 2027.
The Reserve Bank of India (RBI) has issued final guidelines aimed at curbing aggressive sales practices and mis-selling of financial products. Under the new rules, third-party incentives for employees of regulated entities (REs) involved in selling financial products are prohibited. However, banks and non-banking financial companies (NBFCs) are permitted to offer incentives to their own employees for such sales.