Direct Banks To Withdraw Cashback Offers On Ecommerce Platforms: CAIT To RBI

Trade body Confederation of All India Traders’ (CAIT) secretary general emeritus Praveen Khandelwal has reportedly urged the Reserve Bank of India (RBI) to issue directions to banks to withdraw cashback offers on ecommerce platforms.

Citing a letter written to RBI governor Shaktikanta Das, NDTV reported that Khandelwal claimed that “aggressive exclusive discounting and bank cashback offers” have “hurt” traditional retailers. He further alleged that the unhealthy nexus between the banks and ecommerce platforms has led to a drastic impact on traditional brick-and-mortar stores. 

He claimed that 1.5 Lakh retailers are struggling due to “unfair practices” of ecommerce platforms, adding that 50,000 small businesses have already shut down due to the alleged “collusion”.

Khandelwal, who is also a BJP member of Parliament (MP), further wrote that banks “unknowingly or knowingly” are a part of a cartel that is creating an “unhealthy market”.

The fresh salvo came just a day after Khandelwal shot off a letter to commerce minister Piyush Goyal to suspend the upcoming festive season sales of Amazon and Flipkart, claiming that the events will further harm domestic traders.

As per news agency PTI, he also urged the minister to immediately roll out ecommerce rules and undertake steps to “promote and protect” small retailers of the country. Noting that an “uneven playing field” had been created for local players, Khandelwal alleged that both Flipkart and Amazon favour select sellers and disadvantage the vast majority of sellers.

“Ecommerce giants promote preferential treatment and collusion. These platforms engage in preferential listings and exclusive partnerships with specific sellers and brands, leading to an unfair market environment,” the letter read.

The sabre-rattling comes days after Khandelwal called on the union government to suspend the operations of Amazon and Flipkart in the country. CAIT, which claims to represent more than 8 Cr Indian retailers, has been advocating a ban on the ecommerce platforms for years for alleged deep discounting tactics.

The developments came close on the heels of the Competition Commission of India (CCI) reportedly finding Amazon India and Flipkart guilty of flouting antitrust directives as well as prioritising certain sellers and listings. 

Additionally, the CCI has reportedly accused Samsung, Xiaomi and other smartphone makers of “exclusively” collaborating with Amazon and Flipkart to launch their products in contravention of Indian antitrust laws.

In two separate reports detailing the antitrust violations, the CCI’s additional director general G V Siva Prasad said that “exclusivity in business” is against free and fair competition as well as consumer interest. 

Earlier last month, union minister Goyal also slammed Amazon India over “predatory pricing policies”, saying that ecommerce major’s plans to invest billions of dollars in India were only to offset its losses. However, he later clarified that the Centre is not against online marketplaces but wants them to operate fairly.