Disclose commission from insurers, MFs: RBI to RRBs

To increase transparency, the Reserve Bank of India (RBI) today directed regional rural banks (RRBs) to disclose the commission they receive from mutual funds and insurers for referring their products to customers.

"Keeping in view the need for transparency in the interest of the customers... It has since been decided that regional rural banks (RRBs) should disclose to the customers, details of all the commissions or other fees received, if any, from various mutual fund or insurance companies for marketing or referring their products," RBI said in a notification.

The above instructions, the RBI said, would come into force with immediate effect.

The RBI further said RRBs may be marketing or referring, several competing products of various mutual fund or insurance companies to their customers.

Last month, the Reserve Bank directed commercial banks to disclose the commission they get from mutual funds and insurance companies for marketing or referring their products.