Module: General Practice
Q8: According to the RBI guidelines on responsible business conduct, which scenario is classified as mis-selling a financial product?
✅ Correct Answer: B
The correct answer is selling a product that is unsuitable for a customer's evaluated profile, even if they provided explicit consent.
Mis-selling applies to both the bank's own products and products from other companies.
This happens under five conditions.
The first is if the product does not fit the customer's profile, even if they said yes clearly.
The second is giving wrong, missing, or misleading information.
The third is when the customer did not clearly say yes.
The fourth is forcing a customer to buy a second product just to get the first one.
The fifth is any other bad practice named by the proper financial rule-maker.
Mis-selling applies to both the bank's own products and products from other companies.
This happens under five conditions.
The first is if the product does not fit the customer's profile, even if they said yes clearly.
The second is giving wrong, missing, or misleading information.
The third is when the customer did not clearly say yes.
The fourth is forcing a customer to buy a second product just to get the first one.
The fifth is any other bad practice named by the proper financial rule-maker.
🧠 Real-World Scenario:
Imagine an 80-year-old pensioner walks into a bank looking for a safe fixed deposit. Suddenly, a greedy agent convinces him to sign up for a high-risk stock market fund.
According to the rules, they can punish the bank for mis-selling even though the pensioner signed the papers. This means banks are strictly responsible for selling products that actually match a person's age and risk profile.