MUMBAI: The Reserve Bank will issue comprehensive norms to regulated entities on advertising, marketing and sales to prevent mis-selling of financial products and services to consumers.
Mis-selling of financial products and services by regulated entities (REs) has significant consequences for both customers and the financial sector, the central bank said in its Report on Trend and Progress of Banking in India 202425, released on Monday.
It is proposed to review the extant instructions on conduct-related matters associated with the engagement of recovery agents and recovery of loans, and issue harmonised instructions in this regard, it added.
About digital frauds, the report said the RBI continues to work with stakeholders, including the Ministry of Home Affairs, to develop and operationalise measures to curb such fraud and strengthen customer protection.
“REs need to put in place robust internal controls, ensure sufficient grievance redress officers at all levels, and enhance digital financial literacy to address digital frauds,” the report said.
Recent initiatives include the development of MuleHunter.ai to facilitate system-wide learning to identify and flag potential mule accounts.
Another initiative is a digital payments intelligence platform to leverage AI to flag risky transactions and share intelligence for fraud detection and prevention.