HDFC is forcing property insurance on a ₹1Cr home loan. Is this actually mandatory?

First-time homebuyer purchasing an apartment in Bangalore. I am aiming for loan disbursement with HDFC in early March '26.

The HDFC sales rep is insisting that buying property insurance through them is strictly mandatory for the loan disbursement. Their insurance representative sent me policy options with premiums ranging from ₹1 Lakh to ₹4+ Lakhs for a ₹1Cr ready to move in property.

The online information is conflicting, and these premiums feel like a complete rip-off. For those who have recently dealt with HDFC or similar banks:

• Is property insurance actually an RBI mandate, or just a bank tactic to meet cross-selling targets?
• If it is required, can I purchase a much cheaper third-party policy independently instead of using their options?
• How exactly did you negotiate or bypass this to save money?

Looking for clear facts and recent experiences. Thanks!