Sanjai Nanmugan K R Finance Library

In a significant move to strengthen customer rights and promote ethical banking practices, the Reserve Bank of India (RBI) has issued strict guidelines directing banks to refund the entire amount paid by customers in cases of mis-selling of financial products or services. This landmark directive aims to ensure transparency, accountability, and fairness across India’s banking ecosystem, placing customer interest at the center of financial services. What Is Mis-Selling? Mis-selling occurs when a bank or financial institution sells a product or service that is: Unsuitable for the customer’s financial profile or risk appetite Sold using misleading or incomplete information Pushed without the customer’s explicit consent Bundled with another product without clear disclosure Marketed without properly explaining features, charges, or risks Importantly, RBI clarified that even if a customer gives consent , the sale can still be considered mis-selling if the product does not align with the custo...