Social media influencers, creators and digital marketing partners have come under the lens of the Reserve Bank of India (RBI) over promotion of financial products.
The RBI has now issued strict guidelines to banks and other financial institutions in order to prevent the mis-selling of financial products.
The new norms, which will be applicable starting January 1, 2027, will bar banks and financial institutions from putting in place incentive structures that provide a ground to employees or agents to mis-sell any products.
While financial influencers (finfluencers) do not come under the category of employees or agents at present, the new norms would apply to them as well, according to the central bank guidelines.
The central bank said the new norms are aimed at promoting healthy selling of financial products and services. These have been put in place by way of amendments to the ‘Advertising, Marketing and Sale of Financial Products and Services by Regulated Entities’.
Customers often complain that bank employees, agents and other such entities manage to convince them to buy financial products that are sometimes not suitable for them.
The RBI said offering products that are unsuitable for the customer, providing misleading or inaccurate information, selling products without obtaining explicit consent from the customer, and mandatorily bundling products together constitute mis-selling.
“In cases where mis-selling of a financial product/service is established, the bank shall refund the entire amount … and also intimate the customer about cancellation of the sale,” the RBI said.
The RBI’s new guidelines also place overall responsibility on the regulated entities (read banks and other financial institutions) for all advertising, marketing and sale of financial products undertaken directly or through agents or outsourced arrangements.
Under the new norms, influencers, affiliates, LSPs, or any other similar digital marketing intermediaries engaged for promotion or customer acquisition have been categorised under the broader category of DSAs/DMAs.