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Don't let banks offer cashback on e-commerce platforms: CAIT tells FM

Don't let banks offer cashback on e-commerce platforms: CAIT tells FM

CAIT complained against alleged collusion of banks with big e-commerce firms, such as Flipkart, Amazon, Snapdeal, in granting cashback and incentives. It said this was against the RBI's Fair Practices Code.

In a letter to Finance Minister Nirmala Sitharaman, traders' body Confederation of All India Traders (CAIT), Monday, complained against alleged collusion of banks with big e-commerce firms, such as Flipkart, Amazon, Snapdeal, in granting cashback and incentives. CAIT said this was against the Reserve Bank of India's (RBI)'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 per cent cashback 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.

Khandelwal complained that banks never provide similar offers to shoppers who use online mode of payment while buying directly from traders.  Such actions by banks are hindering the smooth functioning of small-scale shops and breaching the 'right to trade' guaranteed in the constitution to every Indian, Khandelwal added.

CAIT urged the finance minister to probe why banks were extending discounts only on purchase from designated e-commerce portals. "To 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.

The traders' body also wrote a letter to Prime Minister Narendra Modi on Sunday, requesting to roll out a concrete policy and regulatory mechanism to check the malpractices by e-commerce companies.

CAIT wrote, "Big e-commerce companies having deep pockets are leaving no stone unturned in monopolising the e-commerce business and retail trade of Inda with their mal practices and violating FDI policy of the government and relevant laws and rules."

The traders body said they have made several complaints against the etailers but no concrete action has been taken till now. The CAIT also expressed disappointment with various government authorities for failing to protect the sanctity of the policy and law of the government.

"Though the Ministry of Commerce has taken some initiatives to impress upon them to conduct their business activities but these e-commerce companies have been avoiding the law on one pretext or the other".

The CAIT urged government to introduce a new ecommerce policy on an urgent basis with an explicit provision of an empowered Regulatory Authority to regulate and monitor the e-commerce business in India.

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