Rajeev Anand, CEO, IndusInd Bank
The proposed guidelines by the Reserve Bank of India (RBI) on how banks should advertise, market or sell financial products may have a short-term impact on lenders, but will prove positive for the banking sector in the long run, said Rajeev Anand, CEO of Indus Bank. Business line.
“I can completely understand where the RBI is coming from. Their focus over the last few years has been around protecting customers. They have taken several measures over the last three years, and this is more or less a continuation of that process. I’m sure they have seen some data that suggests there is some element of mis-selling by banks, both in the private and public sectors,” Anand said.
“So, tightening these things in my opinion may hurt some banks in the short term, but it will make the banking system much stronger in the future. It is too early to say whether there will be a material impact on other income, but the primary focus should be on adhering to the letter and spirit in terms of the guidelines,” he added.
According to the draft standards, mis-selling would entail not only recovering amounts taken from the customer but also disbursing compensation, which could keep banks’ eagerness to push third-party products such as insurance, mutual funds and annuities in check. This could affect their other income, as well Business line was reported earlier this month. Analysts say some private banks are likely to be more affected by the proposed standards, as the gap between their core income and other income has shrunk sharply over the past years.
Acquisition financing
Anand said the Reserve Bank of India’s final guidelines on acquisition financing could provide IndusInd with the opportunity to partner with some major banks in large transactions.
“This (acquisition financing) has been a demand of Indian banks for a long time. It gives us a fair shot at being able to participate in M&A financing. For banks like us, it gives us an opportunity to partner with some of the larger banks to look at such transactions,” Anand said.
He added that not all transactions will move to Indian banks from foreign banks, but the approval provides a fair playing field for Indian lenders to participate in this space. He says Indian private sector banks and many state-owned banks have very strong underwriting capacity and will be able to compete with foreign lenders in this space. The RBI’s final guidelines state that banks can undertake acquisition financing up to 20 per cent of their tier-1 capital, against the proposed cap of 10 per cent.
Posted on February 22, 2026
