CCI Rules in Favour of Indian Bank: No Market Dominance or Unfair Practices Found

CCI Rules in Favour of Indian Bank: No Market Dominance or Unfair Practices Found

The Competition Commission of India (CCI), led by chairperson Ravneet Kaur and comprising members Anil Agrawal, Sweta Kakkad, and Deepak Anurag, dismissed the complaint filed by A. Ram Babu against Indian Bank alleging violations of sections 4(2)(a) and 4(2)(b) of the Competition Act, 2002.

The CCI found that the market for term deposit services in India is competitive, with numerous players operating, and no evidence suggests any dominant behaviour by the Indian Bank. Therefore, there are no grounds for claiming contravention of Section 4 of the Act.

Ram Babu (the Informant) held two fixed deposit accounts with the public sector Indian Bank for one year, with one account accruing interest monthly and the other accruing interest quarterly.

After RBI policy changes led other banks to offer higher interest rates, A. Ram Babu, wanted to withdraw his two fixed deposit accounts from the Indian Bank and open new accounts elsewhere. However, the Indian Bank levied penalties of ₹27,951 and ₹22,500 on the principal amounts of the two accounts, prompting him to lodge a complaint with the bank ombudsman seeking redressal. The complaint was closed without resolving his grievances.

Ram Banu argued that the Indian Bank's conduct constitutes unfair and discriminatory practices, amounting to a misuse of its market position and violating Section 4 of the Act.

The CCI closed the case after defining the relevant market for examining the Indian Bank’s alleged dominance and conduct. The CCI established a decisional practice that defines the relevant market for Non-Banking Financial Companies/Banks based on the specific product in question. In this instance, the distinct features of term deposits – including maturity, interest, and liquidity – differentiate them from other types of deposits, leading to the relevant market being defined as the market for the provision of term deposit services in India.

The CCI asserted that the provision of term deposit services in India operates uniformly across all regions, eliminating any potential geographical differentiation. Furthermore, the market operates in a competitive landscape with diverse players, including public and private-sector banks, post offices, and various non-banking financial companies.

In conclusion, the CCI found no evidence of Indian Bank possessing a dominant position in the relevant market. Consequently, no contravention of Section 4 of the Act was established.