India, June 16 -- The Reserve Bank of India (RBI) has introduced stricter regulations aimed at curbing the mis-selling of financial products and services, placing tighter controls on incentive-driven sales practices across banks and other regulated entities.

Under the revised framework, banks and financial institutions will no longer be allowed to implement incentive structures that encourage aggressive or misleading sales tactics. However, the central bank clarified that incentives paid directly by regulated entities to their employees will still be permitted, provided they do not result in unfair sales practices.

The new directions, titled Advertising, Marketing and Sale of Financial Products and Services by Regulated Entities, will c...