CAIT writes a letter to the Union Finance minister Nirmala Seetharaman urging her to stop banks from providing cashback discounts on ecommerce purchases and demands a probe on how Banks provide such offers only to designated ecommerce purchases. Traders’ body Confederation of All India Traders (CAIT) in a letter to Finance Minister Nirmala Sitharaman said that banks act in partnership with e-commerce companies to provide incentives to customers, a policy against the Reserve Bank of India’s Fair Practices Code.
“In the present case, it has been noticed that several Banks including State Bank of India, Bank of Baroda, ICICI Bank,, Axis Bank, Citi Bank, HDFC Bank, Kotak Mahindra Bank, HSBC Bank, RBL Bank and others have entered into an unholy alliance with e-commerce companies prominently with Amazon and Walmart-owned Flipkart, forming a cartel and thereby granting 10 percent cash back and other incentives in lieu of making payments using respective bank cards while purchasing goods from online portals,” wrote Praveen Khandelwal, National Secretary General, CAIT.
The letter expressed its concern, that the same banks won't provide the same benefit to shoppers who use online mode of payment while buying directly from traders. This inequality is against the ‘right to trade’ guaranteed in the constitution to every Indian in addition to being a violation of Competition Act, 2002. “Surprisingly, till date, no auditor or competent authority has ever questioned this discrepancy and neither the Reserve Bank of India has questioned such a brazen unethical irregularity of business by the banks,” the letter stated. Earlier, CAIT written to PM Modi demanding a empowered regulatory authority to regulate and monitor the e-commerce business in India.
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