IndusInd Bank CEO: RBI’s stringent cross-selling guidelines to strengthen banking system

Rajiv Anand, CEO of IndusInd Bank

“I can fully understand where the RBI is coming from. Their focus over the last few years has been on protecting customers. Several measures have been taken in the last three years and this is to that extent a continuation of that process. I am sure they have seen some data that suggests that there has been mis-selling by banks, both in the private and public sectors,” Anand said.

“So therefore, tightening this in my view may hurt some banks in the short term but make the banking system much stronger in the future. It is too early to say whether there will be a material impact on other revenues, but the primary focus should be on adhering to the letter and spirit of the guidelines as far as the guidelines are concerned,” he added.

According to the draft standards, misselling will not only involve refunding customer amounts but also paying out compensation, which could curb banks’ enthusiasm to keep a lid on third-party products such as insurance, mutual funds and pensions. This could affect their other income such as business line had reported this earlier this month. A few private banks are likely to be hit harder by the proposed norms, analysts say, as the gap between their core income and other income has narrowed sharply in recent years.

Acquisition financing

Anand said the RBI’s final guidelines on acquisition financing could give IndusInd the opportunity to tie up with some of the bigger banks for large transactions.

“This (acquisition financing) has been a demand of Indian banks for a long time. It gives us a decent opportunity to participate in mergers and acquisitions. For banks like us, it gives us an opportunity to partner with some of the bigger banks to look at such transactions,” Anand said.

He added that not all transactions will move from foreign banks to Indian banks, but the approval provides a level playing field for Indian lenders to participate in this space. He said India’s private sector banks and many state-owned banks have very strong underwriting capabilities and will be able to compete with foreign lenders in this area. As per the RBI’s final guidelines, banks can undertake acquisition financing up to 20 per cent of their Tier 1 capital, while the proposed ceiling of 10 per cent is not feasible.

Published on February 22, 2026