Two separate Reserve Bank of India moves are about to change the experience of holding a credit card in India, and they pull in the same direction: more control for the cardholder, less room for the bank. The first is a tightening of how banks sell. The second is a quiet acceleration of how fast your credit behaviour shows up on your file. Neither has made the headlines a rate cut would, yet both will be felt by anyone who carries a card.
The selling rules arrive first in importance. On 15 June 2026 the RBI issued the Commercial Banks (Responsible Business Conduct) Second Amendment Directions, 2026, with effect from 1 January 2027. They take direct aim at two practices most cardholders have run into without quite naming them: being pushed into add-on products to get the thing they actually came for, and discovering, too late, that what they were sold was never right for them.
The end of "buy this to get that"
The headline provision is a ban on compulsory bundling. The RBI defines it plainly, as the practice of making one product or service conditional on taking another, whether the bank's own or a third party's. The familiar version is the home-loan applicant nudged into a term-insurance policy from the bank's sister company, sometimes financed by a fresh loan on top of the original one. On the cards side it shows up as the "your card upgrade comes with this insurance add-on" pitch, or the protection plan that appears on a statement after a hard-sell phone call.
From 2027 that conditionality is not allowed. Where a product genuinely is needed as a risk mitigant, the customer must be free to buy it from any provider, not only the one the bank prefers. Bundling stays legal when it is voluntary or genuinely free of extra cost, so a complimentary add-on is fine. What ends is the version where the answer to "do I have to take this?" was effectively yes.
A refund becomes mandatory when mis-selling is proven
The second pillar is what happens after a bad sale. Until now, getting money back for a mis-sold financial product meant a grievance process with an uncertain outcome. The new directions make the refund mandatory once mis-selling is established. The bank must return the entire amount paid, cancel the sale where that applies, and compensate the customer for any loss caused by the mis-selling under its approved policy.
Three supporting mechanics give that teeth. Banks must set up a way to take feedback within 30 days of selling any financial product, to confirm the customer actually understood its features and risks. A customer can lodge a mis-selling complaint within the timeline set by the relevant regulator, or within 30 days of receiving the signed terms where no timeline is specified. And banks cannot fund the purchase of a product, their own or a third party's, out of a sanctioned loan without the customer's explicit consent. The RBI has also moved against "dark patterns", the interface tricks that steer people into choices they did not intend, across bank websites and apps.
For a cardholder, the practical shift is in bargaining power. The protection plan you never asked for, the insurance quietly added to a limit-enhancement call, the cover sold on a promise it did not keep: each of these now sits inside a framework where a proven mis-sale has to be unwound and refunded, not argued over indefinitely.
Your credit file now moves in days, not weeks
Running alongside the conduct rules is a change to credit reporting that has been arriving in stages. Until 2025, banks updated the bureaus once a month, so a payment cleared early in a cycle could take until month-end to register. The RBI shortened that to a fortnightly cycle, every fifteen days, from 1 January 2025. Through 2026 the cadence has tightened further towards weekly reporting, with lenders submitting data on a near-weekly schedule rather than twice a month.
The effect cuts both ways, and for a careful cardholder it cuts favourably. A full, on-time payment lifts your file faster. A closed card or a cleared default drops off sooner. A wrongly reported late payment can be disputed and corrected on a tighter loop, and the directions on dispute handling require resolution within set timelines. The flip side is that a genuine miss also surfaces quickly, so the cushion that monthly reporting once gave a late payer is gone. The discipline that builds a strong score is the same as it always was, and we have written the full playbook for that in our guide to building a 780-plus CIBIL score on a single card. What has changed is the speed at which that discipline, or its absence, becomes visible.
What this means in practice
Put the two together and the cardholder of 2027 is better protected and more exposed at the same time. Better protected because the bank can no longer make an add-on the price of admission, and can no longer keep the proceeds of a sale it should not have made. More exposed because the credit file that lenders price you on refreshes almost in real time, so there is nowhere for a slip to hide for three weeks.
None of this is a reason to change which card you hold. It is a reason to change two habits. First, treat every add-on pitch, on a call, in an app, at a branch, as optional until proven otherwise, and say no to anything presented as a condition of the product you came for. Keep the signed terms, because the complaint window runs from the day you receive them. Second, assume your bureau file is current within the week, and run the card accordingly: full payment on the statement date, utilisation under 30 percent, no scramble for fresh credit you do not need.
The RBI has spent two years shifting the balance of a credit-card relationship toward the person holding the card. The 2027 rules are the clearest move yet. The cardholders who benefit most will be the ones who know the rules exist and use them.
Sources
- Reserve Bank of India, Commercial Banks (Responsible Business Conduct) Directions, 2025 and amendments
- Business Standard, RBI tightens norms on bundled products; lenders to refund for mis-selling (15 June 2026)
- Upstox, New RBI rules to stop mis-selling and compulsory bundling by banks from January 2027 (15 June 2026)
- Outlook Business, RBI's New Mis-Selling Rules Explained: What Changes for Bank Customers from 2027
- Business Standard, RBI's new 15-day credit reporting rule: what it means for your credit score
Frequently asked
When do the new RBI mis-selling rules take effect?
The Reserve Bank of India issued the Commercial Banks - Responsible Business Conduct Second Amendment Directions, 2026 on 15 June 2026, and the new mis-selling and bundling provisions come into force from 1 January 2027. Banks have until then to align their sales processes, complaint mechanisms, and refund policies with the directions.
What is compulsory bundling, and is it banned under the new rules?
Compulsory bundling is when a bank makes one product conditional on buying another, such as requiring a term-insurance policy from its own group company to sanction a home loan. From 1 January 2027 the RBI prohibits a bank from making the availment of any product conditional on a third-party product or service. Where a product is genuinely needed as a risk mitigant, the customer must be free to buy it from any provider.
Will I get a refund if a bank is found to have mis-sold me a product?
Yes. The directions make a refund mandatory once mis-selling is established. The bank must refund the entire amount paid for the product or service, cancel the sale where applicable, and compensate the customer for any loss arising from the mis-selling as per its approved policy.
How often is my credit score updated now?
Since January 2025 banks and NBFCs report credit data to the bureaus fortnightly, every fifteen days, instead of monthly. The RBI has moved the cycle shorter still, towards weekly updates through 2026, so a payment, a closed card, or a settled default reflects on your file in days rather than weeks.
Do these rules apply to credit cards specifically?
The Responsible Business Conduct directions apply to commercial banks across their retail products, which includes credit cards. The faster credit-reporting cycle applies to every credit account on your bureau file, cards included. So both changes touch a typical cardholder directly: how their data is reported, and how add-on products are sold alongside the card.
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