Jamshedpur, Dec 1: Expressing its serious concern over granting of 10% cash back or discount by some of the premier Banks of the Country exclusively on purchase of goods from e-commerce portals of Amazon & Walmart owned Flipkart and painting the Banks as Villain for the business community , the Confederation of All India Traders (CAIT) today lodged a complaint with Union Finance Minister Nirmala Sitharaman levelling serious & grave charges on several Banks for entering into an unholy nexus with Amazon, Flipkart & other e-commerce companies, forming a cartel with them for indulging into Anti-competitive practices and offending Fair Practices Code of RBI for the Banks kill the small businesses of India. The CAIT has also charged the Banks for infringing the Fundamental Right to Trade and discrinination within the people of the Country which is prohibited under the Constitution of India.
The CAIT in its communication to Sitharaman said that ” prevailing 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.” The CAIT has also sent similar communication to Union Commerce Minister Piyush Goyal seeking his immediate intervention.
CAIT National Secretary Suresh Sonthalia in their complaint letter to Mrs. Sitharaman charged the Banks for grave violation of Article 19 & Article 301 of the Constitution of India and Fair Practices Code of RBI for Banks as also violating Section 3(1) read with Section 3(3) of the Competition Act, 2002 . They have prominently named State Bank of India, ICICI Bank, HDFC Bank, Axis Bank, Citi Bank, Kotak Mahindra Bank, Bank of Baroda, HSBC Bank, RBL Bank for creating a mass disruption in business activities conducted by small businesses in the Country and adopting a discriminatory approach towards traders and citizens of India. They said that these Banks are granting 10% cash back & other incentives on purchase of goods from e-commerce portals of Amazon & Flipkart by using their respective cards for making payments.
Surprisingly, if the same product is purchased from an offline market even by using the card of the same bank, the respective Bank is not offering any Cash back or incentives. Such a collusion of the Banks with these Companies restrict the 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.
Sonthalia further cited Section 3 of the Competition Act,2002 which says that “No enterprise or association of enterprises or person or association of persons shall enter into any agreement in respect of production, supply, distribution, storage, acquisition or control of goods or provision of services, which causes or is likely to cause an appreciable adverse effect on competition within India. (2) Any agreement entered into in contravention of the provisions contained in subsection (1) shall be void”.
The offers of 10% cash back by the Banks in the instant case is a violation of Section 3 and by default the Banks have colluded with e-commerce Companies for an Agreement to provide these discounts exclusively on purchases from e-commerce portals which poses an adverse effect on competition within India.