In a significant communication sent today to Shri Shaktikanta Das, RBI Governor, BJP MP from Chandni Chowk and Secretary General Emeritus Mr Praveen Khandelwal expressed his grave concerns regarding unfair role of Banks colluding with e commerce companies like Amazon & Flipkart in helping them to create an unhealthy and uneven level playing field much to the disadvantage to traditional retailers.
Mr Khandelwal in his communication to RBI Governor charged Banks for having an unhealthy nexus between banks, e-commerce companies, and brand owners, which is distorting the retail ecosystem. This collusion has caused significant harm to traditional retailers.
Mr Khandelwal narrated that the aggressive exclusive discounting strategies and bank cashback offers from institutions like HDFC, SBI, and others—with discounts as high as 10% on platforms like Flipkart and Amazon—have further disadvantaged traditional retailers. In addition, other banks such as ICICI, Axis Bank, One Card, and Kotak Mahindra have formed similar partnerships, offering discounts, cashback, and additional benefits. This raises serious concerns about the fairness of these business practices. Whether knowingly or unknowingly, these banks have become part of a cartel that is creating an unhealthy, uneven market, posing serious challenges to competition and running counter to the fundamental right to trade.
In this context Mr Khandelwal referred to the recent CCI report which reveals that these platforms, in collaboration with smartphone Original Equipment Manufacturers (OEMs) such as Samsung, Xiaomi, Realme, Motorola, VIVO, and OnePlus, have violated national laws.
These actions contradict the vision of our honorable Prime Minister, Shri Narendra Modi Ji, in promoting an “Atmanirbhar Bharat.” The findings indicate that these companies have engaged in exclusive supply agreements and deep discounting practices, thereby seriously undermining offline retailers, who play a critical role in employment generation, tax contribution, and providing competitive services and offers to consumers- said Khandelwal
Mr Khandelwal also said that It is alarming that approximately 1.5 lakh retailers are struggling due to these unfair practices, with over 50,000 small businesses having already shut down. Many small traders have been driven to rely on grey market stocks as a result of the collusion between e-commerce platforms and OEM-backed aggregators, causing severe harm to our domestic economy.
Given the gravity of the situation, Mr Khandelwal has urged RBI Governor to Issue immediate directions to banks to cease offering exclusive discounts and cashback benefits that are not extended to traditional retailers.Initiate an investigation into these partnerships and the purchasing patterns associated with them. It is crucial to examine why a significant number of consumers have been able to purchase hundreds of mobile phones using bank cards over the past five years, which may point to unfair practices.
Mr Khandelwal said that protecting both retailers and the financial integrity of our banking sector is of utmost importance. Breaking this nexus is essential for safeguarding our economy.