RBI draft rules ban dark patterns in banks by July 2026

What the RBI has proposed

The Reserve Bank of India (RBI) has released draft amendment directions to tighten how banks and other regulated entities advertise, market and sell financial products. The draft framework targets mis-selling and deceptive digital journeys, and it seeks to curb practices that lead to customers buying unsuitable or unwanted products. The RBI has said the rules are meant to eliminate “dark patterns” from websites and mobile apps and to make customer consent meaningful and explicit.

The draft was issued on February 11, 2026. Compliance is proposed from July 1, 2026 for regulated entities covered by the framework.

Who the draft rules apply to

The RBI’s draft “Responsible Business Conduct Amendment Directions, 2026” applies to All India Financial Institutions (AIFIs). The draft framework explicitly includes NABARD, National Housing Bank, EXIM Bank and SIDBI.

The draft also describes obligations for regulated entities including banks, NBFCs, housing finance companies, and rural and urban co-operative banks. The focus is on product sales and servicing conduct across physical channels and digital interfaces.

The problem the RBI is trying to fix

The RBI’s draft directions come against the backdrop of concerns around mis-selling in retail finance. The context provided with the draft refers to a survey that found hidden fees and misleading prompts across major banks, raising concerns about how customers are nudged into purchases.

The RBI’s stated intent is to address long-standing issues such as incomplete disclosure, bundling of unwanted products, and design choices in apps and websites that pressure users into consenting to additional products or services.

What counts as “mis-selling” under the draft

For the first time within this framework, the RBI draft sets out a detailed definition of mis-selling under Clause 3A. An institution would be considered to have mis-sold a product if it sells a product unsuitable for a customer’s profile even where explicit consent exists, provides incomplete or misleading information, completes a sale without explicit customer consent, or bundles an additional product with one the customer actually requested.

The draft also describes mis-selling as selling a product or service without the customer’s explicit permission, sharing misleading information that leads to an ill-informed decision, or forced bundling of unnecessary products.

Suitability checks move to the centre of product sales

The draft places suitability assessment at the centre of product sales. Clause 32ZF proposes that institutions determine whether a product is suitable and appropriate before marketing or selling it.

The suitability standard described in the draft links product fitment to the customer’s profile, including factors such as age, income, financial literacy and risk appetite. The draft also states that banks will not be able to sell products that are not suitable or appropriate for a customer’s profile even with the customer’s explicit consent.

Explicit consent, not bundled consent

A key consumer-facing change is the requirement for clear, informed consent before selling any product. The draft states that blanket or bundled consents will not suffice and that consent for multiple products or services must be obtained individually.

The draft also includes a design expectation for digital journeys: banks must design user interfaces such that customers cannot grant consent without reading terms and conditions. It also prohibits deceptive user interface practices such as pre-checked boxes and hidden choices.

Forced bundling and third-party selling practices

The draft prohibits compulsory bundling, defined as any attempt to make one product or service conditional on availing another. The draft explicitly uses examples such as forcing insurance or mutual funds along with loans.

It also addresses distribution practices involving third-party products. Bank staff and agents are not expected to be incentivised in ways that push aggressive sales, especially for third-party products. The draft states that staff cannot receive commissions or “gifts” from insurance or mutual fund houses, and it requires that agents selling inside bank branches be clearly distinguishable from bank staff.

Dark patterns to be removed from apps and websites

The RBI draft directs banks to remove “dark patterns” from websites and mobile apps by July 2026. It describes dark patterns as deceptive design practices that manipulate user experience and can lead to false advertisements and misinformed decisions.

Examples of dark patterns cited in the context include false urgency, baiting, disguised advertisements, subscription traps, hidden fees, misleading prompts, and pre-ticked boxes. The draft approach is to prohibit digital interfaces or sales tactics that mislead the user during purchase journeys.

Refunds, compensation and customer feedback loops

The draft requires strong remediation when mis-selling is proven. In case of proven mis-selling, banks have to refund the entire amount paid and also compensate the customer for any loss arising from the transaction. The context also notes that a bank may have to refund 100% of the amount even if the customer had given explicit consent, reflecting the draft’s focus on suitability and fair conduct.

The draft also asks banks to create grievance or feedback mechanisms. Customers can provide feedback within 30 days, and banks are required to collect customer feedback within 30 days of a sale through unbiased surveys. Institutions must prepare a half-yearly report on the findings to support review of existing policies and product or service constructs.

Key provisions and dates at a glance

Why the draft matters for customers and investors

For customers, the draft is designed to reduce hidden charges, pressured selling and unwanted add-ons, especially in digital channels where consent can be engineered through interface design. By explicitly banning dark patterns and disallowing consent that is bundled or implied, the RBI is setting expectations for clearer disclosures and cleaner purchase flows.

For investors and market participants, the draft signals tighter oversight of fee-based distribution and third-party product sales through banks and regulated entities. The draft also raises compliance expectations around documentation, sales conduct, grievance handling and ongoing monitoring through surveys and half-yearly reporting.

What happens next

These are draft guidelines issued by the RBI for public feedback. The final norms will be issued after stakeholder comments are reviewed, and the proposed implementation date cited is July 1, 2026. Until final directions are notified, institutions and customers will track how the RBI finalises definitions, enforcement processes, and operational details such as disclosures, consent capture and remediation workflows.