CAIT demanded Investigation into unholy nexus of Banks with E commerce Companies to differentiate consumers Gross Violation of Right to Equality, FDI Policy and Competition Act.
Confederation of All India Traders
“Vyapar Bhawan”
925/1, Naiwala, Karol Bagh, New Delhi-110005,
Phone: +91-11-45032664, Telefax +91-11-45032665
E-mail: teamcait@gmail.com Website: www.cait.in
Ref. No.: 3403/1/51 | Dated: 21st April,2022
Smt Nirmala Sitharaman
Hon’ble Minister for Finance
Government of India
New Delhi
Dear Smt Nirmala Sitharaman Ji,
Sub: Investigation into unholy nexus of Banks with E commerce Companies to differentiate consumers Gross Violation of Right to Equality, FDI Policy and Competition Act
We invoke your kind and immediate attention towards an unfair and unholy act of both several Government & Private sector Banks which are colluding with foreign funded e-commerce giants including Amazon & Flipkart by helping them in creating an uneven level playing field by providing cash back on usage of credit & debit cards of their respective Banks on purchase of goods from e-commerce portals. It is astonishing that this facility is not available to consumers who purchase goods from the offline market even using the same cards . It’s a crystal clear gross violation of Right to Equality, FDI Policy and several sections of the Competition Act..
Prominent banks who are indulged in this most uncalled for and sinister game of collusion with e commerce giants like Amazon & Flipkart are State Bank of India, HDFC Bank, ICICI Bank, Citi Bank, Kotak Mahindra Bank, HSBC, Bank of Baroda, RBL Bank, Axis Bank etc. Such unfair practice gives a shopping advantage to people for purchasing goods exclusively from e commerce portals but not to people who shop from offline shops. Thus, creating an inequality scenario between online and offline markets of the Country.
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 also violate Article 19 and Article 301 of the Constitution of India which guarantees Freedom of Trade and Commerce in the Country. It is most surprising that these Banks which claims that they earn almost 1 or 1.5% from the payment transactions are able to provide 10% cash backs and other benefits to the consumers. lt is a matter of investigation that whether the Banks are providing cash backs from their funds or they are funded by someone to provide these cash backs and other benefits. Prima facie, it looks like a gross irregularity in the banking system of the Country which needs your immediate attention.
Providing cash back exclusively to online shoppers through portal of e commerce companies like Amazon. Flipkart and others ,assumes the status of a cartel which leads to providing help to Amazon. Flipkart & others for indulging into mat-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. lt is a cartel between Amazon & Flipkart with Banks which also encourages unfair competition in the market which is prohibited under Section 3(1) read with Section 3 (3) and 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.
You are requested to take immediate cognisance of this grave irregularity and violation of laws by the Banks and order immediately a time bound investigation of this cartelization of Banks & e-commerce companies like Amazon & Flipkart in order to protect both consumers & traders of the Country and the sanctity of banking systems and other applicable laws.
We are sure that it will receive your immediate attention and we look forward to your valued response.
Thank you. With regards
Yours truly
Praveen Khandelwal
National Secretary General
Confederation of All India Traders
