A complaint was filed with the Competition Commission of India (CCI) accusing Canara Bank of engaging in anti-competitive practices related to various loan transactions. The allegations were brought forward by Tamil Nadu-based KSD Zonne Energie LLP. The complainant accused the public sector bank of arbitrarily altering interest rates and levying retrospective charges. They also claimed that the bank colluded with property valuers to undervalue assets in loan recovery proceedings.
According to the complaint, Canara Bank imposed unfavourable lending terms and hindered efforts to transfer the loan to other banks offering better interest rates. The complainant alleged that the bank deliberately delayed the release of collateral documents, which competing lenders required to process the loan transfer. This, they claimed, restricted their ability to secure better terms and suppressed competition.
The CCI examined whether Canara Bank had violated sections 3 and 4 of the Competition Act, which deal with anti-competitive agreements and abuse of a dominant position. The regulator noted that while the complainant accused the bank of using its dominant position to increase interest rates arbitrarily, Canara Bank’s actual market share in the Indian banking sector was 5.73%.
The Commission clarified that a market share of 5.73% does not constitute dominance in the banking and loan services market, which includes multiple large financial institutions. Since dominance is a prerequisite for any charge under section 4, the absence of such a position meant the allegations could not be upheld.
The complaint also included an accusation that Canara Bank had conspired with property valuers to deliberately undervalue assets for auction under the SARFAESI Act. However, the CCI found no supporting evidence to suggest collusion between the bank and valuers.
Based on the available information, the CCI concluded that there was no prima facie case of contravention of the Competition Act. The allegations concerning abuse of dominance and anti-competitive agreements were therefore dismissed. The Commission found the conduct of Canara Bank did not violate the provisions of sections 3 or 4 of the Act.
Read More: CCI Clears Merger of Quality Care India with Aster DM Healthcare.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.
Published on: May 21, 2025, 2:21 PM IST
Team Angel One
We're Live on WhatsApp! Join our channel for market insights & updates