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Banking industry

CAIT Urges Finance Minister to Stop Banks from Offering Cashbacks on Online Purchases

Strategic Insights

— 1 min read

The Confederation of All India Traders (CAIT) has written to the finance minister, expressing concerns that banks are offering cashbacks on online purchases in collusion with e-commerce companies. This practice allegedly violates the 'Fair Practices Code' of the Reserve Bank of India. Praveen Khandelwal, national secretary-general of CAIT, stated that several banks have formed an alliance with online marketplaces, including Amazon and Flipkart, granting a 10% cash back and other incentives for using their cards to make purchases online. CAIT has termed this arrangement as an "unholy nexus" and "cartelisation of banks," and has asked the finance minister to take immediate action to stop this practice.

Key Takeaways:

  • The Confederation of All India Traders (CAIT) has written to the finance minister to stop banks from offering cashbacks on online purchases in collusion with e-commerce companies.
  • CAIT alleges that this practice violates the 'Fair Practices Code' of the Reserve Bank of India.
  • Several banks, including State Bank of India, Bank of Baroda, ICICI Bank, Axis Bank, and others, have formed an alliance with online marketplaces such as Amazon and Flipkart.
  • This alliance grants a 10% cash back and other incentives for using their cards to make purchases online.
  • CAIT has termed this arrangement as an "unholy nexus" and "cartelisation of banks," and has asked the finance minister to take immediate action to stop this practice.
  • CAIT alleges that banks are partnering with multi-national companies to "destroy indigenous businesses" and are flouting policies and government rules.
  • CAIT claims that this practice has caused "mass scale damage to small Indian businesses" against Prime Minister Narendra Modi's vision for Atmanirbhar Bharat.

Statistics:

  • 10% cash back offered by banks in collusion with e-commerce companies.
  • Number of banks involved in this practice: State Bank of India, Bank of Baroda, ICICI Bank, Axis Bank, Citi Bank, HDFC Bank, Kotak Mahindra Bank, HSBC Bank, RBL Bank, and others.
  • Number of online marketplaces involved: Amazon and Flipkart.

Sources:

  • CAIT letter to the finance minister
  • Reserve Bank of India's 'Fair Practices Code'
  • ABP Private Limited copyright article (2020)

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