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‘Unholy alliance’ between banks and e-commerce firms to destroy indigenous businesses, CAIT writes to Finance Minister Nirmala Sitharaman

CAIT termed the joint workings of e-commerce companies like Amazon and Flipkart with banks as an ‘unholy nexus’ and ‘cartelisation of banks’.

November 30, 2020 / 01:31 PM IST

The Confederation of All India Traders (CAIT) has asked Finance Minister Nirmala Sitharaman to address the alleged issue of banks’ “unethical practices in collusion with big e-commerce companies.”

In a letter to the Finance Minister dated November 30, CAIT alleged that banks and e-commerce companies had colluded to provide cashbacks and incentives to a section of people, constituting discrimination and violating policies such as the Fair Practice Code for Banks.

CAIT termed the joint workings with banks as an “unholy nexus” and “cartelisation of banks”. It further alleged that banks have partnered with multi-national companies to “destroy indigenous businesses.”

It added that banks were partnering to flout policies and government rules which has caused “mass scale damage to small Indian businesses against Prime Minister Narendra Modi’s vision for Atmanirbhar Bharat.”

“The track record of the Banks in the instant matter amounts to a clear cut case of discrimination between the people of India which is a gross violation of Article 19 & Article 301 of the Constitution of India and Fair Practices Code of RBI for Banks as also violate Section 3(1) read with Section 3(3) of the Competition Act, 2002,” it argued.

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Taking names, it listed State Bank of India (SBI), Bank of Baroda (BoB), ICICI Bank, Axis Bank, Citi Bank, HDFC Bank, Kotak Mahindra Bank, HSBC Bank and RBL Bank for “unholy alliance” with Amazon and Flipkart in its letter.

CAIT noted that banks give incentives such as 10 percent cashback to customers for using their respective banks cards for purchases online, but do not extend the same benefits offline.

“Such collusion restricts offline traders from conducting smooth business and therefore amounts to breach of Article 19 & Article 301 of the Constitution of India which guarantees Right to Trade to every citizen of India,” it added.

“The above circumstances have prompted us to knock at your doors with a sense of confidence that you will be kind in taking immediate cognisance of this serious issue and will take immediate necessary steps to stop this practice and will order for a thorough probe about the source of extending such a huge level of discounts by the Banks only on purchase from designated e-commerce portals,” it said.
Moneycontrol News
first published: Nov 30, 2020 01:31 pm

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