Banks should refrain from placing any incentives which may lead to mis-selling of any product or service, 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 call customers only after getting their consent and restrict to doing so in office hours itself.
“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 be organizing competitions among business units for sale of products or services, earmarking specific days for targeted selling, 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 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 purchase of the product or service and also compensate the customer for any loss arising due to mis-selling as per an approved policy.
The RBI is also thinking of asking banks to ensure that its user interfaces do not deploy any dark patterns, and listed a set of nearly a dozen cases of such working which ought to 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 give feedback on the draft.
(Disclaimer: This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)
