Fair trade watchdog Competition Commission of India (CCI) has dismissed allegations that public sector lender State Bank of India (SBI) abused its dominant market position by imposing unreasonable and unfair conditions on car loan borrowers.
A complaint filed with CCI had alleged that SBI was abusing its dominant position by not informing car loan borrowers in advance about papers required to be signed for availing a loan and compelling them to sign various standard forms which contained one-sided terms.
In an order dated April 2, the CCI held that as prima facie SBI did not appear to be in a dominant position in the relevant market (the market for vehicle loans in India) “the question of abuse of dominant position by it does not arise”.
The Commission noted that vehicle loan market in India is largely competitive with the presence of many big players from public sector banks, private sector banks and foreign banks besides, non-banking finance companies and co-operative banks.
“In a highly competitive vehicle loan market, the presence of many large players itself indicates existence of enough competitive constraints to the opposite party (SBI) so as to exercise its dominance,” CCI said.
The complained was filed by one Ashok R. Mansata, who is the president of Concern for Citizens, a non-profit voluntary organisation.
According to the complainant, the borrowers of car loans had to sign standard forms in the presence of its officials within its premises.
It was stated that since a copy of the loan documents and forms, to be signed for availing a loan, is not given to the borrowers in advance, it was not possible for them to understand all the papers in front of SBI officials as a result the borrowers had no choice but to agree to the terms and conditions of the bank.
It was also alleged that SBI did not give the borrowers a copy of the documents signed by them.