**Executive Summary**
The document contains the Reserve Bank of India (Commercial Banks – Undertaking of Financial Services) Amendment Directions, 2026. It amends the Master Direction regarding agency business and referral services. These directions take effect on April 1, 2026.
**Key Points / Main Content**
* **Definitions:**
* "Regulated financial products and services" are defined.
* "Third-party Product and Service (TPPS)" is defined with reference to the Responsible Business Conduct Directions, 2025.
* "Third-party Product and Service Provider (TPPSP)" is defined.
* **Amendments to Master Direction:**
* Sub-paragraphs (1) and (2) under paragraph 7 of the Master Direction are deleted.
* Paragraph 8 of the Master Direction is deleted.
* Paragraph 52 is substituted to allow banks to act as insurance brokers departmentally subject to certain conditions.
* Paragraphs 58 to 61 are substituted with new guidelines on facilitating TPPS sales under agency business arrangements.
* Banks must deal only with regulated financial products and services and comply with the Responsible Business Conduct Directions, 2025.
* TPPS must be listed on digital channels offered by the bank.
* Agency business must be fee-based without risk participation, disclosed to customers.
* TPPSPs must have robust customer grievance redressal arrangements.
* Paragraph 62 is substituted with guidelines for banks referring customers to TPPSs:
* Banks must comply with the Responsible Business Conduct Directions, 2025.
* The bank's role must be purely referral, with no involvement in TPPS processes and a disclaimer to customers.
* The bank's brand cannot feature in product documents.
* TPPS lists must be published transparently on digital channels.
* TPPS selection requires due diligence, and robust grievance redressal arrangements are mandatory.
* Banks can only collect a one-time fee from the TPPSP.
**Impact Analysis**
**Commercial Banks**
* **Impact:** Need to implement the revised guidelines on agency business and referral services, particularly regarding regulated financial products, TPPS, and TPPSP.
* **Action Required:** Update internal policies and procedures to comply with the new directions, ensuring compliance with all requirements regarding TPPS, transparency, and customer protection.
**Customers**
* **Impact:** Increased transparency and clarity regarding the nature of referral arrangements and the bank's role in TPPS offerings.
* **Action Required:** Be aware of the disclaimer regarding the bank's limited role in TPPS, verify that TPPS providers have customer grievance redressal arrangements and review the information available on digital channels offered by the bank.
**Third-Party Product and Service Providers (TPPSPs)**
* **Impact:** TPPSPs must comply with new conditions to be eligible for referral through Banks.
* **Action Required:** Establish robust customer grievance redressal arrangements in place and maintain eligibility for referral arrangements.
Key Entities Referenced
Reserve Bank of India: India's central bank, responsible for regulating the banking sector.
Reserve Bank of India (Commercial Banks – Undertaking of Financial Services) Directions, 2025: The existing regulatory guidelines that this document amends.
Banking Regulation Act, 1949: The primary law governing the regulation of banking companies in India, under which the Reserve Bank of India derives its powers.
Reserve Bank of India (Commercial Banks - Responsible Business Conduct) Directions, 2025: Directions that this document references for additional compliance requirements.
DOR.RAUG.AUT.REC.No. /24.01.041/2025-26 XX 2026
Draft Reserve Bank of India (Commercial Banks – Undertaking of Financial
Services) Amendment Directions, 2026
In exercise of the powers conferred by Section 35A of the Banking Regulation Act,
1949, the Reserve Bank being satisfied that it is necessary and expedient in the public
interest to do so, hereby, amends the directions issued vide Reserve Bank of India
(Commercial Banks – Undertaking of Financial Services) Directions, 2025 (“Master
Direction”).
2. The extant regulations governing agency business and referral services have been
reviewed and, accordingly, the Master Direction has been amended and the revised
regulatory framework is provided below. Further, the regulatory instructions on
customer service and conduct aspects shall be consolidated in the Reserve Bank of
India (Commercial Banks - Responsible Business Conduct) Directions, 2025.
3. Short Title and Commencement
(1) These Directions shall be called the Reserve Bank of India (Commercial Banks -
Undertaking of Financial Services) Amendment Directions, 2026.
(2) These Directions shall come into effect on April 1, 2026.
4. These Amendment Directions shall modify the Reserve Bank of India (Commercial
Banks – Undertaking of Financial Services) Directions, 2025 as under:
(i) In paragraph 4 of the Master Direction, the following sub-paras shall be inserted
as follows:
a) after sub-para (17), the following shall be inserted, namely: -
“(17A) Regulated financial products and services means financial products and
services which fall under the regulatory framework of any of the financial sector
regulators viz. Reserve Bank of India, Securities and Exchange Board of India (SEBI),
Insurance Regulatory and Development Authority of India (IRDAI), Pension Fund
Regulatory and Development Authority (PFRDA).”b) after sub-para (18), the following shall be inserted, namely: -
“(19) Third-party Product and Service (TPPS) means a product or service as defined
under Reserve Bank of India (Commercial Banks - Responsible Business Conduct)
Directions, 2025.
(20) Third-party Product and Service Provider (TPPSP) means an entity which has
entered into agency business or referral arrangement with a bank to offer its product
or service (Third-party Product or Service (TPPS)) to a customer of the concerned
bank.”
(ii) Sub-paras (1) and (2) under paragraph 7 of the Master Direction stand deleted.
(iii) Paragraph 8 of the Master Direction stands deleted.
(iv) In paragraph 52 of the Master Direction, the following shall be substituted,
namely:-
“A bank may, at its option, act as an insurance broker departmentally subject to the
conditions mentioned under paragraph 58 on agency business.”
(v) For paragraphs 58 to 61 of the Master Direction, the following shall be
substituted, namely:-
“58. Banks may facilitate the sale of a TPPS under the agency business arrangement
as specified below:
(1) Banks shall only deal with regulated financial products and services in which a
bank is permitted to deal in as per sub-section (a) to (m) and (o) of Section 6(1)
of the Banking Regulation Act, 1949. Only such TPPS which are covered under
the arrangement shall be listed or displayed on websites, mobile applications,
or any other digital banking channels offered by the banks.
(2) Banks shall ensure that it is in full compliance with the instructions on Reserve
Bank of India (Commercial Banks - Responsible Business Conduct) Directions,
2025.
(3) Agency business shall be undertaken on fee basis without any risk participation.
This shall be explicitly disclosed upfront to the customers.
2(4) It shall be ensured that TPPSP whose products are being sold has robust
customer grievance redressal arrangements in place. The bank may facilitate
the redressal of grievances.
59. [Deleted]
60. [Deleted]
61. [Deleted]”
(vi) For paragraph 62 of the Master Direction, the following shall be substituted,
namely:-
“62. Banks may refer their customers to a TPPSP only for regulated financial products
and services (except insurance) subject to the conditions listed herein:
(1) Banks shall comply with the instructions on Reserve Bank of India (Commercial
Banks - Responsible Business Conduct) Directions, 2025.
(2) It shall be ensured that the role of the bank is purely referral in nature and the
bank is not involved in any of the processes relating to the TPPS such as
marketing, distribution, grievance redressal, etc. The same should be made
explicitly clear upfront through a disclaimer to the customers.
(3) The name or brand of the bank shall not feature in any of the product/ service
documents.
(4) The list of TPPS under the referral arrangement of a bank shall be published
on their websites, mobile application, and any other digital banking channels to
ensure transparency.
(5) The selection of the TPPSP shall be done with proper due diligence so as to
take care of the reputational risks to which the bank may be exposed to while
dealing with the TPPSP. It shall be ensured that TPPSP whose products are
being referred has robust customer grievance redressal arrangements in place.
(6) Banks may collect only a one-time fee from the TPPSP at the point of referring
its customers. No other stream of income/ fee or commission in any form should
be collected by the bank under the referral arrangement.”
(Manoranjan Padhy)
Chief General Manager
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