Module: | KYC, NPAs, Advances & Investment Valuations
Q208: Consider the following statements regarding the regulatory framework for sales ethics and third-party products under the 2026 Amendments:
1. Any agent or representative of a third party present within bank premises for sales must be clearly distinguishable from bank employees via 'on-person' identification.
2. Banks are permitted to club consents for multiple products and services together into a single master agreement to streamline the onboarding process.
3. Direct Selling Agents (DSAs) must make an upfront disclosure to the customer regarding any difference in fees or interest rates if a product is purchased through them versus directly from the bank.
4. A bank is strictly prohibited from funding the purchase of a product or service out of any loan facility sanctioned to the customer without obtaining explicit consent.
Which of the statements given above is/are correct?
2. Banks are permitted to club consents for multiple products and services together into a single master agreement to streamline the onboarding process.
3. Direct Selling Agents (DSAs) must make an upfront disclosure to the customer regarding any difference in fees or interest rates if a product is purchased through them versus directly from the bank.
4. A bank is strictly prohibited from funding the purchase of a product or service out of any loan facility sanctioned to the customer without obtaining explicit consent.
Which of the statements given above is/are correct?
✅ Correct Answer: A
The correct answer is A. Statement 1 is correct: The regulatory framework mandates that third-party sales representatives inside bank branches must wear distinguishable 'on-person' identification to prevent customers from mistaking them for bank staff.
Statement 2 is incorrect: The guidelines strictly outlaw the clubbing of consents, requiring that explicit consent for multiple products or services must be obtained individually and unambiguously to prevent mis-selling.
Statement 3 is correct: The rules enforce complete transparency by requiring Direct Selling Agents to explicitly disclose pricing disparities (fees and interest rates) upfront compared to direct bank purchases.
Statement 4 is correct: The directives restrict banks from automatically debiting a sanctioned loan facility to fund the purchase of cross-sold products without explicit, recorded consent from the customer.
Statement 2 is incorrect: The guidelines strictly outlaw the clubbing of consents, requiring that explicit consent for multiple products or services must be obtained individually and unambiguously to prevent mis-selling.
Statement 3 is correct: The rules enforce complete transparency by requiring Direct Selling Agents to explicitly disclose pricing disparities (fees and interest rates) upfront compared to direct bank purchases.
Statement 4 is correct: The directives restrict banks from automatically debiting a sanctioned loan facility to fund the purchase of cross-sold products without explicit, recorded consent from the customer.