The Competition Commission has dismissed a complaint which alleged that private sector lender Tamilnad Mercantile Bank indulged in unfair business practices while providing banking services.
A complaint filed by timber firm Matha Timbers had alleged that Tamilnad Mercantile Bank had abused its dominant position in Tamil Nadu by imposing unfair terms and conditions in its loan agreements and sanction letters.
In a recent order, the Competition Commission of India (CCI) said that “the alleged dominant position of the opposite party (Tamilnad Mercantile Bank) is not established in the present case”.
“The Commission finds that no prima facie case of contravention of the provisions of...the (Competition) Act is made out against the opposite party in the instant matter,” the fair trade regulator added.
CCI noted that many banks operate in Tamil Nadu and offer working capital facilities.
“Even if the relevant geographic market were to be narrowed further to a local level or expanded to include the whole of India, prima facie, the opposite party does not appear to be dominant,” it said.
It was alleged, among other things, that Tamilnad Mercantile was incorporating onerous terms in the loan agreements or sanction letters following which Matha Timbers and firms like it were forced to confine all their banking transactions to that bank.
