Now if you sell wrong insurance, you will have to pay full refund and compensation, rules will change from July 1: – ..

New Delhi/Business Desk: The game of mis-selling of insurance and other financial products by the government and private banks of the country by forcibly or misleading the customers is now going to be curbed. Taking a very tough stance on this issue, Union Finance Minister Nirmala Sitharaman has warned the banks. Sitharaman has clarified that banks should not become insurance companies by abandoning their core functions, such as accepting deposits and giving loans. Addressing the Central Board of Directors of the Reserve Bank of India (RBI) after the budget, he said that many times banks take advantage of the compulsion of customers and give them such policies which they do not need.

Customers’ pockets will not be robbed, banks should improve their working style

The Finance Minister slammed the banks and said that they should stop putting unnecessary financial burden on customers. It is often seen that when a common man goes to the bank to take a loan or get an FD, the employees put pressure on him to buy insurance. Sitharaman said that banks should understand the actual financial condition of customers and their needs. He especially advised to strengthen the ‘CASA’ (Current and Savings Account) base, so that low-cost deposits in the banking system increase and common citizens maintain their trust in banks.

RBI’s new master plan: Strict rules will be implemented from July 1

To stop this arbitrariness of banks, Reserve Bank of India has prepared a revolutionary draft guidelines. Under the new proposed rules, if a bank sells a product to a customer by giving misleading information, then if the complaint is found to be true, the bank will not only have to refund the entire amount to that customer, but will also have to pay compensation for the mental and financial loss caused to him. These rules may come into effect from July 1, 2026. The process of suggestions on this draft released in February has been completed and now it is being finalized.

The illusion of home loan and insurance will end

The Finance Minister also expressed concern over the lack of coordination between the banking and insurance regulators. Giving an example, he said that while taking home loan, customers are often trapped in the trap of double insurance. When one mortgages one’s property, the risk is already covered, yet banks insist on taking additional insurance policies. Till now there was a lack of clarity regarding jurisdiction between RBI and IRDAI, of which banks were taking advantage. But now this confusion has been removed with the new guidelines.

Health of banking sector and mathematics of deposit growth

During this important meeting, RBI Governor Sanjay Malhotra also shared details of the current banking situation of the country. According to the Governor, deposit growth in Indian banks is currently 12.5 percent, while the pace of loan distribution is at the level of 14.5 percent. Although the demand for loans is high, a satisfactory increase in deposits is also being seen. He indicated that in future, decisions on repo rate and monetary policies will be taken keeping in mind inflation and the economic growth rate of the country, so that balance is maintained between investment and consumption.