Indian cenbank tightens rules to curb mis-selling by lenders

The Reserve Bank of India on Monday issued rules to curb mis-selling of financial products by lenders, banning deceptive marketing tactics ​and tightening norms around customer consent, disclosures and sales practices.

The central ‌bank has banned the use of "dark patterns" in digital interfaces, defining them as design or user-experience techniques that mislead or trick customers into taking actions they did not intend.

Lenders and ​their agents will now be barred from employing such practices across ​websites, mobile apps and other sales channels, the RBI said.

The directive ⁠follows announcements made by the RBI's governor in the central bank's monetary ​policy review in February.

Lenders must subject their interfaces to periodic audits to identify ​and remove unfair features, the RBI said.

The rules form part of amendments to the RBI's responsible business conduct directions and will come into force from January 1, 2027.

The regulator also laid ​out a broad definition of mis-selling, which includes practices such as offering ​products that are unsuitable for the customer, providing misleading or inaccurate information, selling products without obtaining ‌explicit ⁠consent from the customer, and mandatorily bundling products together.

-Reuters