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The Competition Commission of India (CCI) is investigating if banks have been acting as a cartel in fixing lending rates in recent times. The competition regulator confirmed this in response to an RTI query furnished by activist S Dheenadhayalan.
The activist wanted to know if the Commission has initiated any suo motu inquiry into reports citing possible unfair practice by banks which have been quoting mostly similar lending rates. “The issue of banks’ similar interest rates (sic) is under investigation by the Director-General, CCI, in suo motu case No 01/2015,” a communication addressed to Dheenadhayalan said.
Queried for information of the nature of deliberations within, the Commission said the “case is under investigation and is therefore exempt from further disclosure.”
ATM policyDheenadhayalan told BusinessLine that the CCI was also invoked on the issue of sectoral regulator RBI rationalising the use of ATMs. He was told that this petition also was being processed at the CCI.
He had submitted that the RBI had in a directive on March 10, 2008, spoke of an ideal situation “where a customer should be able to access any ATM installed free of charge through an equitable cooperative initiative by banks.” Rationalising ATM use would go against this policy; it could also affect the operational autonomy of individual banks.
The RBI had proceeded to act through a directive on August 14, 2014. This came about after the Indian Banks’ Association sought some changes in existing instructions with regard to free transactions at other bank ATMs.
Free transactionsIt had referred to the growing cost of ATM deployment and maintenance incurred by banks as well as the rising ‘interchange outgo’ due to these transactions. The IBA had sought the removal of free transactions at other bank ATMs at metro centres and other large townships.
After an analysis of the ATM deployment in the country as well as availability of alternative means of electronic payment infrastructure and access, the RBI revised the existing directions.
The number of free transactions for accountholders at other bank ATMs was reduced from five to three a month in six metro centres. The RTI activist said this set a wrong precedent and sought relief, requesting that the matter may be taken up with the RBI.
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