That insurance policy your relationship manager convinced you to buy at the bank? Or the mutual fund they pushed right before you got your FD renewed? RBI has had enough of that.
From January 2027, banks and NBFCs must legally prove that any product they sell you actually suits your needs — and get your clear, written consent before selling it. No more ticking boxes on your behalf.
This matters because banks have long pushed products like ULIPs (investment-linked insurance plans that bundle insurance with market investments and often come with high charges) or traditional insurance-savings combos (endowment plans) that look attractive on paper but may not actually fit your goals or income.
What this means for you
- If your bank relationship manager calls with a "great investment opportunity," you can now ask: how does this suit my specific situation? They're required to answer.
- Investment-linked insurance plans and other complex products — often pushed aggressively at bank branches — will need to clear a suitability check (a formal review of whether the product matches your income, goals, and risk appetite) before being offered to you.
- Your consent must be explicit, not assumed — so read before you sign, and don't let anyone sign on your behalf.
What you can do
- Check any insurance policy bought at a bank branch in the last 2–3 years — if it feels confusing or you don't remember choosing it, you may be able to raise a complaint with the bank or RBI Ombudsman.
- From now on, when a bank offers you any product beyond FDs or savings accounts, ask one question: "Can you show me why this is right for someone in my situation?"
You always had the right to say no — now the rules make it a lot harder for them to ignore that no.
Grow with clarity 🌱