Mumbai, February 11 Banks should refrain from offering any incentives that could lead to the mis-selling of products or services, the Reserve Bank proposed on Wednesday.
In its draft amendment directions for advertising, marketing, and sales of financial products and services by regulated entities, the central bank also proposed that banks should only contact customers after obtaining their consent and restrict such interactions to office hours.
"A bank shall ensure that its policies and practices neither create incentives for mis-selling nor encourage employees/DSAs (direct sales agents) to 'push' the sale of products/services," the RBI said.
Examples of this would include organizing competitions among business units for the sale of products or services, or designating specific days for targeted sales, it said.
"It shall be ensured specifically that no incentive is directly/indirectly received by the employees engaged in marketing/sales of third-party products/services from the third-party," it said.
The draft also proposes that a bank should not be allowed to bundle the sale of any third-party product or service with any of its own product or service, and added that a customer should be given the choice to choose between options from various companies.
In cases where mis-selling is established, banks will have to refund the entire amount paid by the customer for the purchase of the product or service, and also compensate the customer for any losses resulting from the mis-selling, as per an approved policy.
The RBI is also considering asking banks to ensure that their user interfaces do not employ any "dark patterns," and listed a set of nearly a dozen such cases that should be avoided.
It can be noted that Reserve Bank Governor Sanjay Malhotra had first announced the broader intent to come out with such regulations, following which the draft has been issued.
The public has been given until March 4 to provide feedback on the draft.
