As complaints of insurance mis-selling by banks finally prompt regulatory action, Monika examines the Reserve Bank of India’s draft Responsible Business Conduct guidelines and what they could mean for customers. The proposed rules aim to require suitability assessments, explicit consent, and restrictions on coercive sales practices, signalling a shift toward holding banks accountable for putting customer interests ahead of sales targets. Drawing on years of research and documented evidence, she explains how mis-selling has persisted through opaque disclosures, aggressive commissions, and weak enforcement, eroding public trust in the banking system.

Monika argues that while the intent of the new rules is welcome, their effectiveness will depend on clear definitions of suitability, independent monitoring, and reforms to the commission structures that incentivise harmful sales. Without these structural fixes, regulation risks becoming symbolic rather than transformative. She also reflects on how banks could instead build long-term, trust-based relationships with customers by offering transparent financial planning and aligning their incentives with household financial security rather than short-term product sales.

In listener queries, Vijay Panchal from Ahmedabad asks whether to combine Sukanya Samriddhi Yojana with equity investing for his daughter’s future and whether to prioritise NPS or PPF for retirement under the new tax regime; Nitin Gupta from Dehradun seeks clarity on the tax and ownership implications of mutual fund investments held in his minor son’s name as he approaches adulthood; and Hemanth Thyagraj from Bangalore asks how to balance home loan prepayments with ongoing mutual fund investing while pursuing long-term financial independence.

Chapters:

(00:00 – 00:00) RBI’s New Mis-Selling Rules and What They Mean for Bank Customers

(00:00 – 00:00) Suitability Framework, Commissions and Fixing Incentives in Financial Product Sales

(00:00 – 00:00) SSY vs Index Funds and Choosing Between NPS and PPF

(00:00 – 00:00) Managing Mutual Funds Held in a Child’s Name After They Turn 18

(00:00 – 00:00) Balancing Home Loan Prepayment with Long-Term Investing

https://rbidocs.rbi.org.in/rdocs/Content/PDFs/01CBDRAFT11022026ADD95448CA7E4662A409F78D829072C7.PDF

https://www.sciencedirect.com/science/article/abs/pii/S014759671730046X

https://m.rbi.org.in//scripts/Bs_viewcontent.aspx?Id=3370

https://youtu.be/q9kmG-443vo?si=IuTsFG9pbFmysTMD

https://drive.google.com/file/d/1E8939c5w16_NIvshQbcUXW1iZtMLJVcS/view?usp=drivesdk

If you have financial questions that you’d like answers for, please email us at ⁠[email protected]⁠

Monika’s book on basic money management

⁠⁠⁠⁠⁠⁠⁠⁠https://www.monikahalan.com/lets-talk-money-english/⁠⁠⁠⁠⁠⁠⁠⁠

Monika’s book on mutual funds

⁠⁠⁠⁠⁠⁠⁠https://www.monikahalan.com/lets-talk-mutual-funds/⁠⁠⁠⁠⁠⁠⁠

Monika’s workbook on recording your financial life

⁠⁠⁠⁠⁠⁠⁠⁠https://www.monikahalan.com/lets-talk-legacy/⁠⁠⁠⁠⁠⁠⁠⁠

Calculators

⁠⁠⁠⁠⁠⁠⁠⁠https://investor.sebi.gov.in/calculators/index.html⁠⁠⁠⁠⁠⁠⁠⁠

You can find Monika on her social media @monikahalan. 

Twitter ⁠⁠⁠⁠⁠⁠⁠⁠@MonikaHalan⁠⁠⁠⁠⁠⁠⁠⁠

Instagram ⁠⁠⁠⁠⁠⁠⁠⁠@MonikaHalan⁠⁠⁠⁠⁠⁠⁠⁠

Facebook ⁠⁠⁠⁠⁠⁠⁠⁠@MonikaHalan⁠⁠⁠⁠⁠⁠⁠⁠

LinkedIn ⁠⁠⁠⁠⁠⁠⁠@MonikaHalan⁠⁠⁠⁠⁠⁠⁠

Production House: ⁠⁠⁠⁠⁠⁠⁠www.inoutcreatives.com⁠⁠⁠⁠⁠⁠⁠

Production Assistant:⁠⁠⁠⁠⁠⁠⁠ Anshika Gogoi⁠⁠⁠⁠⁠⁠