Banks under CCI lens for similar interest rates

Banks under CCI lens for similar interest rates

Banks under CCI lens for similar interest rates

The Competition Commission will look at whether there is any cartelisation among banks, especially public sector lenders, in keeping the interest rate on savings accounts at the uniform level of four per cent.

The trend has come to the attention of the fair trade watchdog since the Reserve Bank of India (RBI) has decontrolled the interest rates and each bank is free to fix its own rate.
“We will be looking at the issue of the public sector banks offering uniform rate on savings bank deposits even though the rate has been liberalised by the RBI,” Competition Commission of India (CCI) Chairman Ashok Chawla said.

Speaking at a summit here, he said that banks are now to free to determine the rates that they give on savings bank deposits, but “I think almost all the public sector banks and some other banks continue to give only four per cent”.

“So whether that is a result of concerted action on their behalf or otherwise, we will look at that. We will take a call on that,” Chawla noted.

When asked whether the regulator would be looking at only public sector lenders, he replied in the negative. He said some of the private sector banks are offering higher interest rates.

“The issue here is that many banks and perhaps most of them are public sector banks, are offering rate which is common. Whether that is a matter of cartel activity or otherwise we will look at that,” Chawla said.

On a query about the complaint against e-retailers, he said the information came to the Commission only recently.

“We still have to decide whether this is a fit case for further investigation. So the formal investigation, which is actually done by the Director General, after the Commission decides to send it for investigation, that stage has not yet been reached.

“We will get to that stage, one way or the other, in the next one-and-a-half to two months,” he said. Chawla also noted that all aspects about the complaint would be looked into.

Steep discount sales offered by various online retailers have raised concerns of anti-competitive practices.