Mis-Selling Must Stop: Bandhan Chief Flags Target Pressure As Govt Tightens Banking Sales Rules

Bank mis-selling is back in the spotlight after Bandhan Group chairman Chandra Shekhar Ghosh blamed target pressure, while the Centre warned lenders it is an offence.

Why Customers Are Hearing “Mis-Selling Must Stop” Again

Bandhan Group Chairman Chandra Shekhar Ghosh has urged banks to end mis-selling and return to basic customer service. In a PTI report carried by The Hindu (Mumbai edition) on 28-02-2026, he linked aggressive employee targets with wrong selling and said refunds should be processed fast when customers are mis-sold. 

He also flagged tighter monitoring at branches and called for stronger supervision, saying banking should run on service, not sales pressure. The debate has grown louder after the Finance Minister’s warning that mis-selling is an “offence” and lenders should focus on core banking.

What Is The Issue? Mis-Selling And Target Pressure

Mis-selling typically shows up when a customer is pushed into a product that does not fit their needs or risk profile, or when features and charges are not explained clearly. In practice, it often involves insurance and investment-linked products being positioned as “necessary” for a loan or better pricing. 
 

Ghosh’s point is direct: target-driven selling changes staff behaviour at the counter, and customers end up buying products without full understanding. He said this trend rose after banks started setting targets for employees and pushed for quick redress, including returning money swiftly.

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The Main Trigger: Fresh Warnings And Draft Crackdown

The immediate trigger was the government’s sharper tone. Nirmala Sitharaman said mis-selling cannot be treated like routine business and called it an “offence”, adding that banks “cannot afford to mis-sell”. This was reported by India Today as updated on 24-02-2026.

Parallelly, a central bank consultation proposed tighter rules for how banks advertise and sell financial products, including a ban on deceptive “dark patterns”, clearer consent standards and a curb on forced bundling. Reuters reported on 11-02-2026 that public feedback was invited till 04-03-2026, and the final rules were expected to take effect from July 2026.

Before the next table, here is a quick, date-wise view of what pushed the story into the open.
 

After this timeline, the focus has shifted from isolated complaints to system-level checks on how products are sold at branches.

What Happened Earlier: Rising Heat On Cross-Sell Culture

This is not a new complaint line for customers, but the current phase is sharper because it targets sales design. Reuters noted the draft approach expects products to be aligned to customer profile factors like age, income, education and risk tolerance, and it takes aim at conditional selling and misleading product design tactics. (Reuters)

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Consumer-facing explainers have also picked up the refund angle. Economic Times reported that the draft framework could allow customers to claim a 100% refund if mis-selling is established.

Before the next table, a stakeholder map helps readers understand who is pushing what.
 

After this, the pressure point is clear: incentive structures and sales scripts are now under watch, not just complaint desks.

What Key Players Said

Ghosh said banking should be about service, not targets, and argued that target culture fuels mis-selling. He also pushed for quick customer redress, including returning money swiftly when customers are mis-sold.

Sitharaman said mis-selling is an offence and banks cannot treat it like routine business, with a direct public warning to stop.

LoansJagat’s report dated 16-02-2026 says the draft rules propose that if mis-selling is proved, banks must give a 100% refund (and also compensate losses as per policy). 
 

Conclusion

With consultation deadlines and stronger public messaging, banks are likely to face tighter checks on how products are sold. For customers, the next big watchpoint is what changes at branch counters after 04-03-2026.