Mumbai, July 2 -- Even as mis-selling of insurance plans by banks has drawn scrutiny, the sector regulator doesn't want to manage distribution channels and seeks to focus on customer awareness to check the malpractice.

"It's not necessary that every mis-selling is mis-selling, it's also about the customers' understanding of the product," said Swaminathan S Iyer, member (life), Insurance Regulatory and Development Authority of India on the sidelines of an event on Wednesday. "Once you drive home that your understanding is different from what the product is...then I think the absolute number on mis-selling will definitely reduce."

The regulator has facilitated an open architecture for banks and insurance companies, and it is now up to the...