Mumbai: The Reserve Bank of India (RBI) Monday clarified that payment of incentives by third parties to employees of regulated entities is prohibited, but banks and NBFCs are free to incentivise employees for sale of financial products.The RBI said banks "shall not resort to compulsory bundling of any third-party product or service (TPPS) with any of their own products or services". Customers must be given the option to purchase it from any TPPS provider of their choice.RBI rules are aimed at preventing bundling of two products by banks, such as home loans and insurance.In final norms on advertising, marketing and sales of financial products, the RBI said the intention is to ensure that the incentive structures do not lead to aggressive sales practices or mis-selling of products. The final directions are effective from January 1, 2027.The central bank further clarified that social media influencers or other digital marketing intermediaries engaged for promotion or customer acquisition would fall under the definition of direct selling agent (DSA) / direct marketing agent (DMA) engaged by REs to market their products.
RBI puts curbs on banks' sale of third-party products
The Reserve Bank of India has prohibited third-party incentives to employees of regulated entities, while allowing banks and NBFCs to reward staff for selling financial products. New norms, effective January 1, 2027, aim to prevent aggressive sales and mis-selling by ensuring customers have choices and prohibiting product bundling. Social media influencers will be treated as direct selling agents.
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