CCI Closes Complaint Against Indian Bank: No Dominant Act In The Fixed Deposit Market In India
The Competition Commission of India ('CCI') comprising Ms. Ravneet Kaur (Chairperson), Mr. Anil Agrawal (Member), Ms. Sweta Kakkad (Member) and Mr. Deepak Anurag (Member) closed the complaint filed by Mr. A. Ram Babu ('Informant') against Indian Bank ('OP-1') alleging violation of the provisions of Section 4(2)(a) and Section 4(2)(b) of the Competition Act, 2002 ('Act'). The CCI...
The Competition Commission of India ('CCI') comprising Ms. Ravneet Kaur (Chairperson), Mr. Anil Agrawal (Member), Ms. Sweta Kakkad (Member) and Mr. Deepak Anurag (Member) closed the complaint filed by Mr. A. Ram Babu ('Informant') against Indian Bank ('OP-1') alleging violation of the provisions of Section 4(2)(a) and Section 4(2)(b) of the Competition Act, 2002 ('Act').
The CCI held that there are various players operating in the “market for the provision of term deposit services in India” and no evidence exists showing a dominant act of the Indian Bank. Thus, there is no case for contravention of Section 4 of the Act.
Brief Facts:
The Informant had two Fixed Deposit ('FD') Accounts with OP-1, a public sector bank, for a period of one year on which interest accrued on a monthly and quarterly basis, respectively.
The Informant decided to withdraw FDs to open FD accounts with another bank as due to certain changes in RBI's policy, other banks were offering higher interest rates, however, OP-1 imposed a penalty of Rs. 27,951 and Rs. 22,500 on the principal amounts of the two accounts. He approached the bank ombudsman raising his grievances, however, the complaint was closed without any redressal.
The Informant contended that OP-1's conduct is unfair and discriminatory. It is a misuse of its position in the market and violative of Section 4 of the Act.
Observations of the Commission:
The CCI closed the case and defined the relevant market to examine OP's dominance and conduct in the market. It held that the relevant market for Non-Banking Financial Companies/Banks is defined based on the product in question and is a decisional practice of CCI. In the instant case, a term deposit is a distinct product from other types of deposits, in terms of maturity, interest, liquidity, etc. Thus, the relevant market may be defined as “market for the provision of term deposit services in India”.
CCI highlighted that there is no difference between one region and another regarding the provision of term deposit services in India. Moreover, there are various players operating in the market including public-sector banks, private-sector banks, post-offices, and other non-banking financial companies.
In conclusion, the CCI observed that there is no evidence of Indian Bank being dominant and thus, there is no case for contravention of Section 4 of the Act.
Case Title: A.Ram Babu And Indian Bank, Zonal Office, New Delhi & Another
Case No.: Case No. 21 of 2023