Updated: Oct 22, 2019
Bank tie ups with e-commerce companies to offer cash backs, interest free EMIs et al may be a violation of the FDI policy and the Competition Act.
India’s largest trader’s body the Confederation of All India Traders (CAIT) has demanded a high - level enquiry by the government to probe the “unholy nexus” of commerce companies and banks. They allege that this was leading to price distortion to the detriment of millions of small and medium sized traders across India.
As per an article published in the Economic Times, the CAIT criticised the banks for giving cash back and various types of discounts for purchasing goods from e-commerce portals for making payments through their respective credit/debit cards. In the CAIT’s opinion these offers are creating an uneven playing field and run contrary to the Government’s FDI policy and the Competition Act.
Praveen Khandelwal, Secretary General of the Confederation of All India Traders (CAIT) urged Prime Minister Narendra Modi to constitute a Group of Ministers (GoM) to look into the alleged distortions, both in the e-commerce and brick & mortar format of retail.
He mentioned that CAIT representatives will soon meet Commerce Minister Goyal, Finance Minister Nirmala Sitharaman and RBI Governor Shaktikanta Das on this subject and demand justice.
They may also seek an appointment with the prime minister to apprise him of the "unholy nexus" and seek remedial measures.