Demands RBI to take penal action against banks for unholy nexus
New Delhi, NFAPost: Taking the cashback incentives and discounts offered by Banks on purchase of goods from e-commerce portals of Amazon, Flipkart and other e-commerce portals, the Confederation of All India Traders (CAIT) today levelled serious charges against Banks for making an unholy nexus with Amazon and Flipkart.
The traders body alleged that the action of these banks and e-commerce companies lead to infringement of Fundamental Rights of the traders & consumers, violating Preamble of the Constitution of India and FDI Policy of the Government. The CAIT has also charged the Banks for making a cartel with Amazon & Flipkart for promoting unfair practices.
CAIT National President B.C.Bhartia and Secretary General Praveen Khandelwal said the organisation shall be filing a separate complaint to the Competition Commission of India (CCI) demanding investigation against cartel between Amazon-Flipkart and Banks sinch such nexus is proving to be a death knell for the small businesses in India.
Complaint to RBI
In a communication sent to RBI Governor Shaktikanta Das, the organisation alleged that various banks provide schemes of giving 10% discount/cashback on a regular basis from time to time for the purchase of any product from the portal of e-commerce companies Amazon & Flipkart.
These Banks HDFC Bank, State Bank of India, ICICI Bank, Citi Bank, Kotak Mahindra Bank, HSBC, Bank of Baroda, RBL Bank, Axis Bank etc.
CAIT National President B.C.Bhartia and Secretary General Praveen Khandelwal said that the above noted Banks are providing these cash discounts only on purchase of goods from ecommerce by making payment through their Debit/Credit Cards but if the same goods is purchased from a brick and mortar shop, this discount is not provided to the customers by any Bank.
This act of the Banks clearly discriminates between two sets of traders thus violating Preamble of the Constitution of India which guarantees “Equality” and restricts the consumers to purchase goods from offline shops which violate Article 19 and Article 301 which gjjurantgees of Freedom of Trade and Commerce in the country.
Operation of cartel
The organisation further said providing cash back exclusively to online shoppers through portal of Amazon and Flipkart assumes the status of a cartel which leads to providing help to Amazon and Flipkart for indulging into mal-practices of maintaining predatory pricing, exclusivity and creation of an uneven level playing field in the market which is specifically restricted under Press Note No.2 of the FDI policy.
CAIT said that it is a cartel between Amazon and Flipkart with Banks which also encourages unfair competition in the market which is prohibited under Section 3(1) read with Section 3 (3) of the Competition Act. Section 2 of the Competition Act among other things prohibits agreements which cause or are likely to cause an appreciable adverse effect on competition in India.
“Under the circumstances narrated above, CAIT request you to please take immediate cognisance of this matter and issue directives to the Banks to discontinue cash back offers with immediate effect and initiate proceedings as prescribed under the law against Banks for flouting banking norms and their dubious role in helping Amazon & Flipkart on the cost of offline traders-said the trade leaders,” states CAIT.