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Indian banks acting in collusion with e-com firms: CAIT

Dec '20
Pic: Shutterstock
Pic: Shutterstock
The Confederation of All India Traders (CAIT) recently wrote to finance minister Nirmala Sitharaman alleging that many banks are acting in collusion with e-commerce companies to offer incentives to customers, which goes against the Reserve Bank of India's (RBI) fair practices code. These banks don't offer the same benefit to shoppers paying online while buying directly from traders, it said.

"In the present case, it has been noticed that several Banks including State Bank of India, Bank of Baroda, ICICI Bank,, Axis Bank, Citi Bank, HDFC Bank, Kotak Mahindra Bank, HSBC Bank, RBL Bank and others have entered into an unholy alliance with e-commerce companies prominently with Amazon and Walmart-owned Flipkart, forming a cartel and thereby granting 10 per cent cash back and other incentives in lieu of making payments using respective bank cards while purchasing goods from online portals," wrote CAIT national secretary general Praveen Khandelwal.

This, he wrote, is hindering with the smooth functioning of small scale shops thus breaching the 'right to trade' guaranteed in the constitution to every Indian in addition to being a violation of Competition Act, 2002, Indian newspapers reported.

The traders' body called for immediate action to stop the practice and a thorough probe into why banks were extending discounts only on purchase from designated e-commerce portals.

"Surprisingly, till date, no auditor or competent authority has ever questioned this discrepancy and neither the Reserve Bank of India has questioned such a brazen unethical irregularity of business by the banks," the letter stated.

CAIT had earlier written to Prime Minister Narendra Modi seeking an empowered regulatory authority to regulate and monitor the e-commerce business in India, claiming that "big e-commerce companies having deep pockets are leaving no stone unturned in monopolising the e-commerce business and retail trade of India with their malpractices and violating FDI policy of the government and relevant laws and rules".

Fibre2Fashion News Desk (DS)

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