The Reserve Bank of India (RBI) has introduced draft guidelines banning banks from requiring customers to buy third-party products, including insurance, when sanctioning loans. A senior insurance executive said, "The biggest impact will likely be on group credit life policies sold alongside retail loans." These policies cover the borrower's loan balance in case of death and currently total about ₹30,000 crore annually. RBI stated, "Banks shall not bundle the sale of any third-party product or service with any of its own." This move aims to prevent customers from being misled by forced add-on sales during loan onboarding. Credit life insurance has grown quickly with home and retail loans, sold as group contracts covering individuals. Last year, India's life insurance industry earned ₹8.86 lakh crore in premiums, with around ₹4 lakh crore from new business. Of this, retail business was ₹1.5-1.6 lakh crore and group business ₹2.5 lakh crore, with credit life making up roughly ₹30,000 crore. The RBI's fresh guidelines could reshape how such insurance products are sold through banks.