CCI Clears Canara Bank of Anti-Competitive Practices

New Delhi, May 19 (PTI) Fair trade regulator CCI on Monday dismissed a complaint against public sector lender Canara Bank alleging abuse of dominance and anti-competitive conduct in relation to multiple loan transactions.

"The commission is of the view that no prima facie case of contravention of sections 3 and 4" of the Competition Act is made out in the present matter, the Competition Commission of India (CCI) said in the order.

Sections 3 and 4 pertain to anti-competitive agreements and abuse of dominant position, respectively.

CCI observed that Tamil Nadu-based KSD Zonne Energie LLP (complainant) had accused Canara Bank of imposing arbitrary interest rates and retrospective charges.

The complainant alleged that the public sector bank colluded with property valuers to deliberately undervalue assets for auction under the SARFAESI Act.


Further, the complainant had attempted to transfer the loan to other banks offering lower rates, however Canara Bank obstructed the process by withholding collateral documents required by competing lenders.

The complainant said these tactics restricted its ability to secure fair market rates and suppressed competition by forcing reliance on the bank's unfavourable terms.

CCI also noted that the allegation made by the complainant was the arbitrary increase in the rate of interest made by Canara Bank in different loans taken from the bank, by taking advantage of its dominant position in the relevant market.

However, the regulator observed that Canara Bank, which holds a 5.73 per cent market share in the Indian banking sector, cannot be considered to be in a position of dominance in the relevant market for banking and loan services, which includes several large players.

Therefore, in the absence of dominance, the issue of abuse of dominance does not arise, CCI said in its order.

The Commission also found no evidence of collusion between valuers and the bank.