RBI Update - Reserve Bank of India (Urban Co-operative Banks - Responsible Business Conduct) Second Amendment Directions, 2026

The Reserve Bank of India (Urban Co-operative Banks – Responsible Business Conduct) Second Amendment Directions, 2026, effective from 1 January 2027, introduce a comprehensive framework governing the advertising, marketing and sale of financial products and services by UCBs. The amendments define key concepts such as compulsory bundling, dark patterns, explicit consent, mis-selling, DSAs/DMAs and TPPS, and mandate UCBs to adopt a board-approved policy covering suitability assessment, customer compensation, feedback mechanisms and oversight of sales agents. UCBs must obtain explicit customer consent, ensure transparent disclosures, prohibit misleading advertisements, compulsory bundling and dark patterns, conduct suitability and appropriateness assessments before selling products, and establish robust controls over DSAs/DMAs. The Directions also require customer feedback within 30 days of sale, provide for refund and compensation in cases of mis-selling, and mandate compliance with applicable RBI, SEBI, IRDAI, PFRDA, DoT and TRAI regulations, thereby significantly strengthening consumer protection, transparency and accountability in the sale of financial products and services by UCBs.