Wed. Oct 21st, 2020

Allegations of unfair trade practices against Bank of Baroda, rejected

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Competition Commission of India (CCI): While rejecting the allegations of unfair trade practices against
Bank of Baroda in the market of commercial/corporate loan in India, CCI closed
an information filed by Uttarakhand-based firm Dhanvir Food Product in the
matter. Said information was filed by Dhanvir Food Product, which had availed
of a term loan of Rs 7.25 crore from the bank for construction of factory
building and also to purchase plant and machinery, alleging that the penalty
imposed by the Bank upon the Firm to foreclose the loan account was in
violation of the guidelines issued by the Reserve Bank of India (RBI) and
hence, arbitrary, unreasonable and anti-competitive. It was alleged in the
information that the Bank had imposed a penalty of Rs.18,86,711/- to foreclose
the loan account of the Informant for the residual period of 65 months in terms
of clause 25 of the sanction letter. After perusal of relevant documents and
hearing both the parties, CIC observed, “the Informant has not provided any
material to show that Opposite Party-2 (Bank of Baroda) have been imposing
pre-payment penalty or foreclosure charges in pursuance of some agreement
entered into by them with any other enterprise engaged in similar trade or
business. Thus, prima facie, no case of contravention of Section 3 can
be made out against the Opposite Part-2 in the instant case.” The Commission
also turned down the contention of the Informant regarding abuse of dominant
position by the Bank on the ground that as Bank of Baroda was not in dominant
position in the relevant market, it cannot be held guilty of abuse of dominant
position, [Dhanvir Food Product v. Bank of Baroda, [2015] CCI 10, decided on 02.06.2015]
Source: Legal news India

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