What changed
RBI inserted five new definitions into the Responsible Business Conduct Directions, 2025: compulsory bundling, dark pattern, DSA/DMA sub-agent, explicit consent, and mis-selling. Compulsory bundling is now explicitly prohibited. Dark patterns—deceptive UI/UX designs—are banned. Mis-selling now includes selling unsuitable products even with consent, incomplete information, lack of explicit consent, and compulsory bundling. DSA/DMA sub-agents are brought under the same compliance obligations as primary agents.
What it means for you
UCBs must overhaul product sales and marketing to eliminate forced cross-selling and deceptive digital interfaces. Any sale of unsuitable products, even with customer consent, is now mis-selling. Banks need to ensure explicit, recorded consent for every product/service. Third-party agents and their sub-agents face direct accountability, increasing compliance costs and monitoring requirements.
What you must do
- Review all product bundling practices and eliminate any compulsory bundling of services.
- Audit digital platforms (apps, websites) for dark patterns and remove deceptive UI/UX elements.
- Update customer consent processes to capture explicit, informed, and recorded consent for each product.
- Revise DSA/DMA contracts to include sub-agent compliance and monitoring clauses.
- Train sales staff and agents on new mis-selling definitions and prohibited practices.
Who it affects
Urban Co-operative Banks (UCBs), Direct Selling Agents (DSAs) and Direct Marketing Agents (DMAs), DSA/DMA sub-agents, UCB customers and borrowers
What is a 'dark pattern' under these directions?
A dark pattern is any deceptive design in user interface or user experience that misleads or tricks users into actions they did not intend, such as hidden costs or forced subscriptions. RBI bans these for UCBs from January 1, 2027.
Does 'explicit consent' require written documentation?
Yes. Explicit consent must be a specific, informed, and unambiguous indication of choice, given through a duly recorded statement or clear affirmative action. Verbal consent without documentation may not suffice.
Are DSA sub-agents now directly regulated by RBI?
Yes. The directions apply the same compliance obligations to DSA/DMA sub-agents as to primary agents. UCBs must ensure sub-agents adhere to all responsible business conduct rules.